Niki Schwarz of owner of Tikkun Holistic Spa pleads guilty to one misdemeanor count of hoarding and price gouging
By Sam Catanzaro
A Santa Monica spa owner has pled guilty to hoarding and price gouging N95 masks.
On Tuesday, Santa Monica resident Niki Schwarz, owner of Tikkun Holistic Spa at 1460 4th Street, pled guilty in Los Angeles federal court to one misdemeanor count of hoarding and price gouging. The crime carries a statutory maximum sentence of one year in federal prison.
In an October plea agreement, Schwarz admitted that in February she began accumulating N95 respirators in anticipation of a shortage that would be caused by COVID-19. According to the U.S. Attorney’s Office, from the beginning of February until the end of June, Schwarz accumulated nearly 20,000 N95 masks that had been manufactured by 3M (list price ranging from $1.02 to $1.27) and Alpha Pro (list price of 86 cents).
In March, the United States government designated N95 respirators as “scarce materials” under the Defense Production Act of 1950 due to the overwhelming need of health care providers dealing with COVID-19 patients to use personal protective equipment.
Schwarz admitted that she obtained the N95 respirators for the purpose of reselling them at above-market rates, and that she sold the masks for up to $15 each.
Schwarz “accumulated and resold the masks at prices in excess of the prevailing market prices willfully, that is, with knowledge that masks had been designated as scarce materials and with knowledge that accumulation of the designated materials to resell in excess of prevailing market prices was unlawful,” according to the plea agreement.
On March 1, an associate informed Schwarz that the associate was going to stop selling N95 masks because she believed it was crime – and that price gouging could result in one year in prison – but Schwarz continued to sell the masks at inflated prices.