Convicted of selling fake N95 masks while on probation, Lexington man gets more prison time

A former Lexington pharmacy owner who already faced trouble for charity thefts has been sentenced for another fraud scheme in which he sold counterfeit N95 masks during the COVID-19 pandemic.

Adam K. Sloan, 44, was sentenced to 10 months in prison for knowingly selling misbranded, counterfeit M3 N95 masks during the height of the pandemic. He was also ordered to pay $129,353 in restitution.

Sloan, chief commercial officer for Old World Timber, pleaded guilty June 1 in federal court in Lexington to a charge of introducing a misbranded device into interstate commerce with the intent to defraud or mislead.

Austin Sparks, Sloan’s attorney, confirmed Wednesday that Sloan received a sentence of 10 months in prison for the charge and an additional 10 months of supervised release to run concurrently for a total of 10 months.

Sloan will be under U.S. Probation Office supervision for one year after he’s released from prison, according to the U.S. Attorney’s Office.

Nathan Brown, founder and chief executive officer of Old World Timber, also pleaded guilty to the same charge in April. Brown was sentenced in July to 10 months in prison.

Old Word Timber, which has its manufacturing facility in Lexington, specializes in turning wood from old barns and other structures into flooring, wallboard, stair treads and other products.

The business has made a point of providing job opportunities to people who have overcome substance use or had criminal convictions, making “second chance wood by second chance people,” as its website says.

Where the counterfeit masks came from

Both men began to sell N95 masks from a Chinese supplier – Boren Trading Company. Within weeks, red flags began to emerge that the masks were fake, including direct communication from the COVID Fraud and Counterfeit Product Response Team.

Brown and Sloan removed seals from the masks that marked them as counterfeit, and continued to sell them making more than half a million dollars, according to court documents. Between March 3, 2021 and April 9, 2021, Brown caused Old World Timber to sell 57,460 misbranded masks, according to the U.S. Attorney’s Office.

“When the warnings became overwhelming that OWT had sourced misbranded masks, instead of owning up to the reality of the situation, Sloan went along with Brown’s decision to continue selling Boren’s masks, even removing the ‘Peru Seal’ indicators that might have caused purchasers to questions the masks’ authenticity,” prosecutor William Moynahan wrote in a sentencing memorandum.

“...Sloan was willing to cut corners and take chances with N95 masks — items he knew were headed for hospitals and other front-line healthcare facilities.”

In a sentencing memorandum from defense attorney Sparks, he wrote Sloan deeply regrets his poor judgment and does not attempt to excuse or minimize the seriousness of his actions. He said Sloan did not set out to commit fraud, but rather realized the masks were counterfeit too late.

“Faced with a variety of poor choices, he and Mr. Brown unfortunately chose the worst route and tried to re-sell the masks. Mr. Sloan made these decisions out of a fear of the repercussions to the business and a misguided sense of loyalty to his boss and lifelong friend,” Sparks wrote in a sentencing memo. “Mr. Sloan deeply regrets the choice he made.”

Cassie Jacobson, the director of the fraud hotline with 3M, submitted a victim impact statement saying that Sloan’s actions were not victimless. Jacobson also spoke at the sentencing. She wrote that by selling fraudulent personal protection equipment during a pandemic, Sloan “sought to profit off a human tragedy, compromising the safety of medical workers and the general public as a result.”

Defendant violated previous felony conditions

This was not Sloan’s first federal conviction. At the time these charges were filed, Sloan was on supervised release from prison.

Sloan previously served six years in prison for charges of wire fraud, aggravated identity theft, and money laundering after he was found guilty of submitting patient information from a pharmacy he co-owned to a charitable organization to con them into providing financial resources he used for his own benefit.

Sloan applied for funding for patients without their knowledge, then took the money the charity provided, according to a court record.

Sloan obtained more than $1 million from this scheme from 2011 to 2015. He was convicted in 2016.

“Although this previous offense was for entirely unrelated conduct that directly benefited him financially, Sloan evidently did not learn the lesson of needing to steer clear of all nefarious schemes in a medical realm,” Moynahan wrote in a sentencing memorandum.

Reporter Bill Estep contributed to this story.