Faegre Drinker Helps 3M End $14.25 Billion N95 Respirator Scheme in Indiana

Faegre Drinker represented 3M Company in the resolution of a case in federal court in Indiana against Nevada-based Zachary Puznak and Zenger LLC (d/b/a ZeroAqua), ending a fraudulent N95 price gouging scheme involving the promise of billions of nonexistent respirators. On July 9, 2020, the court issued a consent judgement, a permanent injunction and a payment to 3M for donation to COVID-19 charitable relief efforts.

As part of the resolution of the case, Puznak apologized to the State of Indiana, the public official who was the target of the scheme and the people of 3M. In a statement, Puznak said:

“If I understood then what I understand now, I never would have gotten involved in this scheme. . . I am cooperating and have turned over all my communications with the architects of this scheme to 3M, who will share them with law enforcement. I have also sat for a deposition to tell my story on the record to help educate the public officials, health care administrators, and the general public to ensure they do not fall victim to a similar scheme in the future. I am committed to assisting 3M and law enforcement to see justice served.”

3M has stated that it “appreciates Defendants’ cooperation and assistance . .  with 3M’s and law enforcement’s efforts to reduce fraud and price gouging.” 3M also stated that it intends to bring further claims against those Puznak identified as the “architects” of the $14.25 billion scheme to defraud Indiana state officials.

Faegre Drinker partner John Ursu led a multi-office team of business litigation and intellectual property litigators in representation of 3M in this matter, including Indianapolis partners Kathy Osborn and Louis Perry, Minneapolis partner Kerry Bundy, and associates Michael Sawers, Isaac Hall and Kiera Murphy. The case was featured in a comprehensive investigative report by USA Today.

3M has filed a series of similar legal actions across the United States, including a case filed by Faegre Drinker in Minnesota against Matthew Starsiak, AMK Energy Services LLC and John Does 1 through 10, for ongoing attempts to claim affiliation with 3M, and alleged unauthorized use of the company’s famous trademarks to perpetrate a false and deceptive scheme on unwitting individuals and companies during the COVID-19 pandemic. In early July 2020, a Minnesota judge issued a temporary restraining order sought by 3M. The case has been featured in Law360 and Minnesota Lawyer.

3M is working with national and international law enforcement, state attorneys general, and the largest online retail and tech companies in the world to identify illegal activity and help punish criminals, with the end goal being to prevent fraud before it starts and stop it where it is happening.