MS Coast businessman asked for a year to prepare for his PPE price-gouging trial
An Ocean Springs businessman wanted a one-year delay for his trial on charges alleging he bought up personal protective gear and hoarded it for resale at inflated prices during the COVID-19 pandemic.
But federal prosecutors objected to the lengthy trial delay, and a judge agreed.
Now, Kenneth Bryan Ritchey, initially set to go to trial in federal court in Gulfport in March, is set to go to trial in July — the same amount of time prosecutors had recommended for any delay.
Ritchey’s attorney, Tim Holleman, argued in favor of pushing back the trial, saying the case is “factually and legally complex” and involves a “voluminous” amount of records the defense needed time to review for a proper defense at trial.
Holleman also pointed out he would likely need time to find an expert to testify on Ritchey’s behalf because prosecutors are expected to have expert testimony as well.
Prosecutors objected to the extensive trial delay, saying a four- to six-month delay gave Ritchey and his attorney plenty of time to prepare a defense.
Assistant U.S. Attorney Kathlyn Van Buskirk pointed out that Ritchey and his attorney knew he was a target of a criminal investigation as early as April 2020 when FBI agents raided his wholesale distribution business, Gulf Coast Pharmaceuticals Plus in Ocean Springs.
Prosecutor said the evidence collected, including thousands of pages of documents and computer data, is mostly material seized from Ritchey’s business and that the material was promptly returned.
Businessman arrested in January
Authorities arrested Ritchey on Jan. 27, one day after a judge unsealed his indictment.
He is accused of working with 11 unnamed co-conspirators to buy and hoard PPE gear to sell later for big profits. He allegedly defrauded health care providers, including Veterans Affairs hospitals, of $1.8 million.
A federal grand jury indicted Ritchey on one count each of conspiracy to commit wire and mail fraud, conspiracy to defraud the United States, conspiracy to hoard designated scarce materials and hoarding of those materials.
Ritchey pleaded not guilty and is free on bond.
According to the indictment, health care providers asked about the high prices for the PPE gear, but the 11 unnamed co-conspirators sent them messages discouraging them from reporting the business for price gouging.
The co-conspirators tried to justify the high price tag on the items, court papers say, but the PPE gear had been marked up as much as 300% over costs, and providers bought them out of fear and desperation during a national emergency due to COVID-19 pandemic.
Over 300,000 items seized in FBI raid
When FBI agents raided the Ocean Springs business and three building on the property, they seized over 300,000 items, all of which Ritchey had to agree to forfeit to the government as part of his plea.
Here’s a list of the items seized:
- 6,535 N-95 masks
- 8,950 KN-95 masks
- 281,479 surgical and miscellaneous masks
- 22,400 shoe covers
- 21,850 gloves
- 4,295 gowns
- 170 lab coats and coveralls
- 166 face shield goggles
In addition the wholesale distribution business, Ritchey also controlled another unnamed entity and retail pharmacy that profited from the price-gouging scheme.
His co-conspirators, the indictment says , included a warehouse manager and employee in Jackson County along with nine sale representatives with an office in Broward County, Florida.
Ritchey allegedly directed his employees to buy the gear and paid them, for example, 50 cents for each N-95 mask they acquired, plus expenses.
The staff bought the items at home improvement stores in Mississippi, Louisiana, Texas, Alabama, Florida, Georgia, South Carolina and North Carolina, also using military and other discounts in places they could buy up masks in bulk.
The workers also bought masks and other PPE gear online.
GCPP paid an average of $3.49 each for the N-95 mask, but then sold them for $20 each to health care providers, the indictment says.
The sales team was aware of the scheme, the indictment said.
Holleman has been Ritchey’s attorney since he first pleaded guilty to state charge of price-gouging involving the Jackson VA center. A judge sentenced him to five years in prison and ordered him to serve three years under supervision and pay over $54,000 in restitution.
Ritchey is also a former business partner of the late Clark Levi in the Ocean Springs-based business, Alvix Laboratories LLC.
Ritchey had sued Levi after Ritchey sold his interest in Alvix to Levi. The suit alleged Levi promised to shared future profits with him and others once the company grew.
Instead, the lawsuit said, Levi allegedly hid those profits by creating shell companies to avoid showing that Alvix Labs was making more money.
That lawsuit has since been settled.
Meanwhile, Ritchey is facing a sentence of up to life in prison if convicted in the federal case.
This story was originally published March 9, 2021 at 5:50 AM.
