Contracts, emails and spreadsheets that Juanita and Dawn Ramos shared with ProPublica describe how domestic and foreign investors, many with ties to the marijuana industry, have tackled the country's public health disaster.
By J. David McSwane, ProPublica
In late April, as an escalating pandemic stalled most of the country and the federal government was pouring billions of dollars to untested protective mask contractors, Juanita Ramos received a call from a friend in the marijuana business.
Her friend and several other ganjapreneurs were buzzing over what could be a huge payday. They had an order for $ 34.5 million from the Department of Veterans Affairs. A contractor hired by the VA to provide 6 million N95 respirators for the country's largest hospital system had searched for weeks but couldn't find any of the potentially life-saving masks. So he had asked far and wide for help, offering to call in anyone who could help him fund, buy, and deliver masks within his deadline.
His PO, as it is commonly known, had found its way into gamblers in the cannabis industry, where business is done quickly and often in cash. The friend asked Ramos: did she want to participate?
Ramos had modest connections in the medical supply chain through her work with legal marijuana and thought she might be able to help frightened health care workers get much-needed protective gear while pocketing a little extra cash. Ramos, 66, hired her daughter Dawn, 50, and they both made phone calls and called people they knew in the marijuana business.
Marijuana retailers, operating in the no man's land between state legalization and conflicting federal law, often receive funding outside of traditional banks from private equity firms and high net worth individuals. A famous example from The Before Time: Last fall, two Soviet-born businessmen who worked for President Donald Trump's personal attorney, Rudy Giuliani, tried to finance a pot business with cash from a Russian investor.
In the marijuana room, Ramos thought, there are people with deep pockets who can move money quickly to avoid the problems that could slow down such an urgent purchase.
"It's easy money," Ramos told ProPublica. "And the brokerage game in the marijuana and industrial hemp industries – it's exactly the same."
For working on the phones, Ramos and her daughter said they only made about $ 200, but their experience and the records they kept tell a cautionary story for hospitals, agencies, and schools facing one possible second wave of coronaviruses are still looking for masks.
Contracts, emails and spreadsheets that Juanita and Dawn Ramos shared with ProPublica describe how domestic and foreign investors, many with ties to the marijuana industry, have responded to the country's public health disaster.
They reveal that some brokers attempted to use forged documents to gain access to masks sourced from 3M's production lines. The manufacturer who makes the gold standard masks can filter 95% of the particles that could transmit the novel coronavirus.
In an exchange, the owner of a Swiss dietary supplement company outlined his plan to buy millions of 3M masks for $ 3.71 each and resell them to the Federal Emergency Management Agency, whose order masks are $ 7 each.
The emails contain fake certifications from the US Food and Drug Administration. Videos and photos of real or imaginary mask supplies; Bank statements that reflect billions of dollars that could be wired instantly; and of course nondisclosure agreements to keep participants calm.
These coronavirus-era artifacts were collected by a self-described medicine woman who lives with her daughter in Austin, Texas. It was only a few months before she was disgusted by what she saw in the rogue personal protective equipment market and decided to tell her story.
The mysterious woman
I had heard from Juanita Ramos for the first time back in April when I was covering the other side of the VA deal.
I had escorted VA contractor Robert Stewart Jr. on a private plane to Chicago, where he promised I could watch him deliver medical masks to a VA warehouse. However, the reporting trip revealed something else: a close look at the frenzy the federal government sparked when it agreed to pay obscene prices for masks to just about anyone who claimed they could deliver. The only procurement I witnessed that day was McDonald's fast food.
Several times when his business fell apart, Stewart cryptically referred to Ramos, whom he had met on the phone with various makeup agents. Believing Ramos had a connection with Vice President Mike Pence, the head of the Federal Coronavirus Task Force, he greased the wheels to help Stewart extend his contract.
He didn't have a number for this mythical Ramos and I hadn't found out anything about her as of the deadline. Ramos remained a mystery after the story ran, but a non-journalist friend of mine wrote what I thought was a random joke about a non-existent person: "Juanita Ramos is either an Atlanta stripper or a Native American medicine woman."
Ramos had a common name, and I pre-filtered what I knew and searched LinkedIn and other databases for someone with Washington connections. But my friend Crizno (don't ask) had walked into a random google hole late at night and found a photo of Ramos holding a dead eagle given to her by a Cherokee Nation chief when she was training to had completed spiritual medicine.
Weeks later I finally contacted the right Ramos and shared my story of Stewart's unsuccessful VA deal. I told her he thought she was related to the vice president.
"I read this and I'm like holy hell – what?" she said when she first saw the article. "First of all, I don't even like Mike Pence."
Ramos insisted she has no White House ties.
"I help write medical marijuana laws," she said, referring to her work with the Utah Association for Responsible Cannabis Legislation and Sacred Roots Healing, an educational group that helped skeptics accept that non-THC cannabis products don't Children with autism make it super high. She had also worked for a large CBD company in Colorado, the first state to legalize the recreational pot.
"I mean, I'm down for the farmer. And believe me, Mike Pence is not going to screw up the marijuana industry or the farmer."
"I don't know how I became the mysterious woman," she quipped, "but that was a great ha-ha."
It was true, as Stewart said, that she had joined a call with him and Troy King, a former Alabama attorney general who appeared to have become a makeup broker. In the hours before the VA canceled Stewart's contract, King had helped him track down potential mask sellers and financiers.
"I said look, I'll do whatever I can to contact people who may have access to masks, but I don't know if it can happen," she explained, but that was the extent of her role. In retrospect, she's not sure why she was on the phone in the first place. She said she has no connections, no masks, no funding. She complained that after that call, she was inundated with offers from makeup agents, sometimes including customer needs lists and proof of life videos from secret mask supplies.
"I get emails from these guys saying, look, I have 10 million masks, or I have gloves, or we have what was the other one? Dresses. Let us know if you need any. And I think I don't want to have anything to do with these guys. "
I asked her to send me samples of the emails she had collected. She forwarded an April 25 order stating that King had planned to flip the masks, buy them from a foreign seller, and resell them to Stewart, who would then sell them to the VA. In the mask trade it was a "chain of brokers" in which the inventory changes hands several times until the end buyer, in this case the VA, pays a price high enough for everyone to receive a reduction. As soon as the buyer pays, the money drips down.
That order, contained in an email thread with brokers I independently determined to be involved in the deal, was proposed by King through his limited company, the potential masks of the VA from JV Tock Trading Corp., a Canadian, distributor to buy.
Chris Kruger, managing partner at JV Tock, said the company received a call from King and other brokers a few hours before the VA deal was imploded.
The company's executives were asked if we could try to help them save their order, which they are about to lose.
Kruger said JV Tock received a call the next day saying "the attorney general will pull some strings to help you".
The company chose not to work with King and didn't know about the order, Kruger said. His company is on the rise, he said, and has not made a lot of money from efforts to bring more masks to Canadian and US buyers, which has resulted in countless dead ends.
"The entire industry is one of the most frustrating headaches I've ever faced," he said. "Greed and dishonesty are common."
Through a spokeswoman, King denied any involvement in JV Tock.
"The document you attached to your email is not one of my company's orders," he said in his statement.
Three days later, another order showed another broker in Arizona offering to buy millions of the same type of 3M masks for $ 3 a piece from another broker – wait for that. At this point, 3M's list price was $ 1.27. However, the VA had agreed to pay about $ 5.75 apiece, which is a 350% premium, which made a lot of profit for a successful chain of brokers.
I wanted to see more. So I flew to Texas at a critical moment in the state's fight against COVID-19. Hospitals were near full capacity due to an explosion of new infections following mixed signaling from Governor Greg Abbott about the importance and enforcement of wearing masks.
Ramos lives on Circle C Ranch, a master-planned maze of cedar and stone facades southwest of downtown Austin, where residents enjoy a golf course and Olympic-size pool that is inexplicably heated.
She's definitely not the smart White House-related capitalist I was expecting. She calls her higher being the "Creator" and places colored stones on the floor of all wash basins so that when washing hands, bad energy washes away and returns to earth.
In her brown leather cut, Ramos described her dream of helping people while making a modest profit, and how it was sunk by forged documents, misinformation and greed.
"I said to my daughter," Hey, if we were to look at this we might like a dime or two, "she said, referring to the potential profit margin on each mask.
The plan fell apart when friends in the marijuana industry hooked her up with Drew O’Malley of Boston Capital Consultants, Ramos said. Emails and records show that O'Malley, with a background in real estate in Connecticut, tried to broker several high dollar deals with overseas investors and private equity groups, including the VA deal with King and others .
Ramos said her alarming conversations with Boston Capital Consultants eventually led her to sever relationships.
"That Drew told me they put about $ 1.25 on a mask," Ramos claimed. "And I think," What are you talking about? People die and you rip people off for twenty-five dollars? "It's like a broker-broker-broker-broker for about 15 people in the middle, isn't it? And then that dollar mask turns into eight dollars or seven dollars or whatever."
"I don't want to get involved in rip-offs from people," she added. "This is blood money to me."
Emails Ramos' joint show, O'Malley, passed on some letters of intent, commonly known as LOIs, in which potential buyers set out how much they will pay for masks either in a warehouse or on a manufacturer's production line .
On April 29, Ramos received a LOI stating that a Zurich investor named Stephan Schmid, who runs a nutritional supplement company, was hoping to buy 100 million N95 respirators per week from 3M at $ 3.71 each. The end buyers of the business included FEMA and hospitals.
It did so at the same time that King and Stewart were trying to sell the same type of masks to FEMA for $ 7 each. Like the VA deal, the FEMA deal was ultimately canceled.
Schmid didn't answer questions.
O’Malley, who has not returned calls and emails, is no longer with Boston Capital Consultants, according to former boss Aaron Marcy Sells.
Sells founded Boston Capital Consultants in 2018 after a career that included marketing work for New England Patriots owner Robert Kraft. Real estate invested through companies with his initials, launched bars and liquor brands, and more recently traded through AMSCAN Inc., a holding company for cannabis ventures.
"They're all great marijuana types," Ramos said.
Sells claims to have played no role in his company's well-documented negotiations in the PSA trade. "If you had asked me under oath what happened, I couldn't tell you," Sells told ProPublica.
"I don't think Drew did anything wrong," he added. “I think he got caught up with some bad people. … The moment I smelled it, I pulled everyone away and Drew left the company. "
Sells insisted he shouldn't be featured in this story. "I'm not involved in this Ramos and Troy King nightmare," he said. And while I asked him several times if Boston Capital Consultants was as involved in the PSA game as emails from its staff suggested, he only provided opaque layoffs.
"We do a lot of different businesses," he said.
Ramos' emails show the company consistently asked for masks and robes through June, including in explosions of emails labeled "Deal of the Day". For example, on June 5th, Boston Capital Consultants sent out an email depicting alphabet soup of PPE trading terms.
"OFFER OF THE DAY: 5.87 million KN95 masks (FDA) – 0.95 cents per mask on the floor in LA PO / POF received POL …"
KN95s are the Chinese version of the N95. The order is an order from a hospital or government agency. A POF is evidence of funds, e.g. B. a bank statement or a confirmation letter from a bank. POL is a proof of life – video showing the existence.
"THESE MOVES FAST, SO PLEASE," the email ends.
On July 14th, Sells founded his newest company in Massachusetts, Safe and Clean Protection LLC. The stated business purpose is to "manufacture and sell personal protective equipment (PPE)".
Three ways to masks
Resellers have three avenues for obtaining masks. This is evident from interviews with brokers across the country and the dozen of emails Ramos shared.
The first is the all-cash spot purchase, which is done quickly to prevent the government from seizing inventory.
A seller sends that he has a maskless on the floor that is kept in a warehouse or customs control center. A prospective buyer bids for the product and provides either an order or bank records to show that money is available for the deal. In return, the seller provides proof of life. The money is usually transferred to an escrow account, much like a real estate deal, which is released to the seller after the mask is checked.
Dawn Ramos said she saw brokers keep reselling inventory on those spot purchases just to keep it moving – technically not hoarding – so the federal government wouldn't snag it. A realtor "would get it and if he can't sell it and if it's not gone by some time he'll have to move it to another location or it would be confiscated," she said. Under the Defense Production Act, FEMA forced masked property owners to sell to the federal government at market prices if the broker hoards or discounts.
In late April, when hospitals were flooded with COVID-19 cases, the VA's top doctor expressed frustration that FEMA had broken in and accepted shipments the VA had ordered from vendors. FEMA has refused to confiscate supplies from other government agencies.
The second type of deal is a direct purchase from a manufacturer like 3M. To do this, an order must come directly from a hospital or government agency. This approach is less attractive to brokers as it requires more paperwork and control, and the masks sell for near list price.
The third type of business is to buy a production line, as suggested by the Swiss investor. A broker recently told me, "This is basically about trading futures contracts."
This is where rampant manufacturing comes into play. Establishing a connection with a dealer or manufacturer is next to impossible right now, say brokers, and to be heard at all, you have to prove you have support. Several companies, including JV Tock, have reported their trademarks being used in false letters to help sell an illegitimate business.
An exchange that fell into the Ramoses' emails shows the magical thinking that pervades the mask trade.
In early May, a potential UK investor using an obscure international charity worked with a London-based consultancy to determine that he should be a 3M distributor. His proposal included a letter from HSBC Bank that stated more than $ 2 billion in available funds. The package also contained a letter of support from a California-based energy company, which he claimed vouched for his good faith.
Emails show this proposal between Boston Capital Consultants, including its owner, and Joseph Ingarra, who identifies himself as a "major rain maker" at Apex Growth Solutions LLC, based in Palm Beach Gardens, Florida. Ingarra's company appears to be doing some sort of marketing, claiming to use "the world's leading science of how people make decisions".
"I know there is a huge range of 1 to 2 billion in the UK," Ingarra wrote to O’Malley and Sells in early May, referring to a large mask deal.
“Get this shipped in one big shot and paid for quickly,” he said in bold letters.
However, the proposed deal and documents raise questions. First, it comes from Florida. Second, the investor's business address in Delaware is linked to a residential home valued at less than $ 200,000. Third, brokers say that even in late April and early May, it was very unlikely that there would ever be such a large inventory of masks that weren't made in bulk beyond pre-pandemic demand.
Then there is the letter vouching for the buyer on the letterhead from UDECM, the Californian company that designs and builds solar systems primarily overseas. I sent the letter to company owner Albert Rau, who called immediately to tell me that he believes it has been forged like dozens of others he has beaten up in the past few months.
"The letter is 100% wrong," he said. "We don't know the people listed."
Why choose his company? Rau said he didn't know, but as the pandemic began, his company used its international supply chain connections to help some nonprofits find masks. After UDECM dipped its toes in the sea of brokers, "it went viral," he said.
"Everyone has documents out there that are now being forged," he said.
Ingarra said he had no idea the document he shared was not real.
"I have no idea who wrote this letter," he said in an email. "I hope you catch the bastard."
What exactly did we learn here?
Ramos ponders the question as she scratches the ears of Sherlock and Inspector Clouseau, two old, fluffy white toy dogs whose longevity she attributes to daily doses of CBD oil.
History will repeat itself, she said, and she hoped hospitals, schools and governments do not waste time on middlemen and profiteers. If they have to, she said they should do background checks and do more checks.
"I want to see your business license," said Ramos. “I want to know who your lawyer is. I want to see that you have the right to represent a hospital and show me where it's going. "
While life has slowed for Ramos and her daughter, brokers and importers say the global mask shortage persists. Many brokers have told me that they have deviated from masks – "too much trouble" – to focus on other PPE like gloves, which are more difficult to obtain and therefore more expensive.
But masks remain the best protection for workers and hospitals who pray to block a respiratory pathogen, and the US still relies largely on middlemen, importers, and brokers to drive prices up.
Two hours away, in Houston, the fourth largest city in the country, several hospitals have reached the capacity of their intensive care units to treat the sickest patients. Nationwide, the number of daily infections has risen to about ten times the number in April.
Nationwide, the number of COVID-19 deaths has exceeded 150,000. With the pandemic nowhere near under control, schools will reopen without teachers and staff being provided with life-saving masks. It's the perfect storm again – low supply, intense demand, making money.
"It's coming," said Ramos. "It will be repeated."
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