Winnetka businessman charged with price gouging in sale of protective masks during pandemic
A North Shore businessman was charged in federal court in Chicago on Thursday with illegally price gouging customers seeking to purchase protective masks amid the worst of the COVID-19 pandemic.
Krikor Topouzian, 60, of Winnetka, was charged in a criminal information with violating anti-price gouging laws. The misdemeanor charge carries a maximum of one year in prison.
According to the charge, Topouzian, who owns a medical supply company based in Skokie, accumulated in March and April a stockpile of nearly 80,000 respirator masks, including N95 masks, for roughly just over $5 per mask.
Topouzian later sold nearly 40,000 of the masks to customers for prices as high as $19.95 per mask — a markup of up to 367%, the information alleged. Topouzian kept selling the masks at inflated prices despite being repeatedly warned by law enforcement and others that it was illegal.
Nearly all of the sales were made to individual customers, the charge alleged.
An arraignment date for Topouzian had not been set as of Thursday.
“Amassing and reselling personal protective equipment at large markups during a global health crisis is not only greedy, it’s illegal under the Defense Production Act,” U.S. Attorney John Lausch said in a written statement.
Topouzian’s lawyer, Thomas Leinenweber, strongly denied the allegations, saying in an emailed statement that it was unfortunate Topouzian was charged “with something that he absolutely did not do.”
Topouzian’s Concord Health Supply primarily sold pulse oximeters, non-touch thermometers and hand-sanitizing wipes, and once the COVID-19 pandemic hit the company was declared an essential business virtually overnight, Leinenweber said.
Leinenweber said Topouzian “was not looking to get into the mask business” until a former employee who could not sell them on his own approached Topouzian and asked for help.
“Concord priced the masks for individual purchase and was absolutely not gouging,” Leinenweber said. “Concord’s prices have always included all packaging and shipping costs. The overwhelming majority of their customers were extremely satisfied with the products, reliability, and prices.”
Topouzian was at least the third Chicago-area business owner to be charged in U.S. District Court with fraud related to the ongoing pandemic.
Elgin restaurant owner Melissa Turasky was accused in August of fraudulently obtaining a $176,000 paycheck protection loan meant to keep businesses afloat during the pandemic even though she’d abruptly closed the restaurant weeks earlier and terminated all her employees.
In June, Rahul Shah, 51, who owns the Evanston-based technology company N2N Holdings, was accused of falsifying paperwork in April seeking a $441,000 PPP loan.
The cases against Turasky and Shah are pending.
jmeisner@chicagotribune.com
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