Daymond John is denying allegations that he tried to sell N95 face masks at an inflated price to the state of Florida amid the coronavirus pandemic. The founder of the Shark Group and investor on CNBC's Shark Tank slammed a report Wednesday that claimed he attempted to strike a deal that would sell 1 million N95 masks to the state of Florida for $7 apiece.
John insisted that he was trying to help provide the highly sought-after and undersourced medical-grade masks to health care workers and help "identify potential fraud and theft of PPE product." In a statement shared on Twitter, he wrote: "Today's Miami Herald story and subsequent reports are false, inaccurate and shows a complete reckless disregard for the truth. Let me be clear. Proper reporting would have shown I did not set any prices and that my team worked with the state of Florida to: 1. Save lives 2. Help vet the overwhelming amount of incoming PPE offerings based on my manufacturing expertise and guide them how to best do this 3. Play a pivotal role to stop price gouging, and successfully identify potential fraud and theft of PPE product to protect taxpayer funds."
An important message to read in full. pic.twitter.com/qnUiJbgivz— Daymond John (@TheSharkDaymond) April 22, 2020
"States were not set up to vet and operate global supply chain and sourcing," John's statement continued. "Many states were force to blindly wire money to nefarious parties around the world and ultimately never received correct or safe product." He maintained that his company was "serving as an intermediary to vet the numerous 3M distributors and to protect Florida taxpayers" and performing "proper due diligence."
"Our system did exactly what it was intended to do. No money was spent and every penny of taxpayers money remained safe," he said, adding that the company will continue to work with government agencies.
Director of the Florida Department of Emergency Management Jared Moskowitz told the Herald that he trusted John to make a deal as an escrow agent. The Herald reported that several other Florida leaders signed an escrow agreement that said Florida would pay $7 million to John's Shark Group. That money would be put into an escrow account controlled by the law firm Foley & Lardner.
Foley & Lardner general counsel Jim Clark told the Herald that the escrow agreement was set up to "protect the state from getting ripped off by an unscrupulous seller," adding that the firm "had no relationship to the seller." Moskowitz told the Herald that "the reason we decided to go through an escrow agent is more and more vendors wanted money up front because we were identifying potential fraud in the marketplace." He said the escrow process was used in order to "protect the state. ... If the vendor didn't deliver the product, they money was returned through the escrow agent."
But the agreement with 3M and Shark Group fell through on April 13, the Herald reported. A 3M spokesperson told the outlet that the Shark Group is not an "authorized distributor" of 3M N95 masks.