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Doctor entangled in FBI probe of black-market PPE vendor explains desperation to get supplies

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A New Jersey doctor forced to buy PPE from a black-market vendor wound up entangled in an FBI investigation. (Design: Nathalie Cruz for Yahoo Life)

It was Thursday, March 12, when New Jersey primary-care physician Alexander Salerno, MD, was first alerted that the coronavirus outbreak was headed stateside — and with it, growing expectations that medical centers like his would soon be tasked with protecting both patients and health care workers from the disease. But when Salerno, whose family-run practice was started in 1952, called his usual sources for necessary supplies such as masks, gloves and gowns, he was met with a discouraging reply.

“They said, ‘Oh, we don’t have anything. … We can put you on an order list,” he recalls for Yahoo Life.

Faced with mounting pressure, Salerno felt he had no alternative: Eventually, he admits, he turned to the black market to obtain vital personal protective equipment (PPE) for his 110 employees — needed for them to safely provide help to their 16,000 (and counting) patients in need.

But even now — after spending $17,000 on marked-up supplies that would only last his practice through early April, becoming entangled in a resulting FBI black-market investigation, and speaking out about these desperate circumstances — Salerno’s caseload continues to grow, while additional supplies remain unseen.

Dr. Alexander Salerno turned to the black market for PPE. Still, he's left without a stockpile of necessary supplies. (Courtesy of Alexander Salerno)
Dr. Alexander Salerno turned to the black market for PPE. Still, he’s left without a stockpile of necessary supplies. (Courtesy of Alexander Salerno)

A private medical practice facing a surge

Salerno is a second-generation owner of Salerno Medical Associates, with offices located throughout New Jersey’s Essex County, home to many bedroom communities of New York City. But he has maintained a focus on helping a long list of patients throughout the more underserved cities of Orange, East Orange and Newark.

“We are a multi-specialty practice but obviously primary care being the focus,” Salerno tells Yahoo Life. In addition to their thousands of office patients, he says, “We also have one of the longest-running house-call practices. So we are providing care to shut-ins and homebound seniors.”

During his search for coronavirus-related PPE and before turning to the black market, the doctor collapsed two of his practice’s four locations, splitting employees and patients between them as a way of rationing resources. He even installed triage tents in front of the offices in order to provide safe care to non-COVID-19 patients while those being seen inside were those exhibiting COVID-19 symptoms. But despite those precautions, Salerno maintains, without masks, gowns and disinfectants, everybody was at imminent risk.

Triage tents have been set up outside of Salerno's two offices that have remained open. (Courtesy of Alexander Salerno)
Triage tents have been set up outside of Salerno’s two offices that have remained open. (Courtesy of Alexander Salerno)

”We had to really, you know, prepare and protect the staff. And so I pulled all 110 people together and I said, ‘If I don’t protect you, we can’t serve the community,’” Salerno recalls. That’s when he called two of the country’s largest distributors of health care supplies, Henry Schein and McKesson — with whom he’s had relationships for more than 40 years — only to be told they had nothing to offer him.

“In general, the risk remains that we may periodically run out of certain items in the weeks ahead,” a spokesperson for Henry Schein told Yahoo Life via email earlier this month. “We are working with urgency to maximize supply.” Products experiencing high demand and shortages include face masks, hand sanitizers, isolation gowns, jacket and lab coats, shoe covers and surface disinfectant wipes.

“So,” Salerno explains, “I had to start finding other alternatives for getting masks and gowns and shields. And it wasn’t just me.”

Enter: the black market

Salerno recounts the growing realization among many fellow doctors with private practices that, when it came to PPE, they were in the same boat as he was. Also included in that boat, he recalls, were nursing-home directors and visiting-nurse agencies he works with through a “Virus2020!” WhatsApp group chat.

“None of us could get stuff,” he says. “Then, all of a sudden, you know, this door opened up, of alternative vendors that you can buy from. And that’s how I started meeting … what have now been coined black-market vendors.”

It was through one health care associate that Salerno was able to obtain the cellphone number for a particular seller.

“They call them brokers,” he says, and they have “supplies, anything you need, but they’re charging a premium. And that’s literally how I met this gentleman in Irvington. You text to a cellphone number, they contact you, you say what you’re looking for, they’ll send you pictures … they have pictures of what they have so you can really know which gown you’re getting, which mask you’re getting. Then, you know, they give you a price, and some have minimum quantities.”

The particular broker Salerno had contacted on March 18, he says, charged the doctor $12,000 for 1,000 N-95 masks and some surgical gowns — reflecting what Salerno says is a nearly 700 percent markup. “An N-95 mask was less than a dollar per unit when I would get them from Henry Schein,” he says. “Now, at the black-market prices, I was paying anywhere from $8 to $12, and I’ve now seen them as high as $25 a mask.”

After receiving the final price for the products, Salerno wired the money into an account and sent a member of his property management team to a warehouse in Irvington where the exchange took place. The New Jersey doctor then spent another $5,000 on supplies from two other brokers, explaining that he was forced to “start shopping around” to avoid paying the highest prices.

One week and $17,000 later, Salerno turned to the media on March 25 to exclaim that he was a buyer on the black market. The following day he received a call from the FBI.

“They asked for all and any information I have,” he tells Yahoo Life. “And of course I gave them all the information, and they acted pretty quickly.”

Arrests, an auto shop and still no masks

On March 31, the FBI arrested a Brooklyn man named Baruch Feldheim for assaulting FBI agents and making false statements about his possession and sale of scarce medical equipment. The report includes a description matching that of Salerno’s transaction with the seller in an auto repair shop in Irvington, although the New Jersey doctor remains unnamed.

A representative from the Department of Justice (DOJ) was unable to confirm for Yahoo Life the connection between the two men or to provide any further information as a result of the ongoing investigation.

And Salerno explains that despite the interference of the FBI, he still finds himself at a dead end in his ongoing need for PPE. And because of that involvement, in fact, he can no longer even buy via the black market.

“Some people were arrested and now, unfortunately, anyone hears my name … they’re not even answering me anymore,” he explains. “We go to Henry Schein like three times a week and they don’t have [what we need]. … There’s nothing coming from FEMA [Federal Emergency Management Agency] to community practices or to distributors that deal with community practices.”

Salerno maintains that these desperate circumstances are what led him to the black market to begin with.

“It wasn’t even a decision to think about or ponder about,” he says. “We can’t get infected. Nobody would have any other option. Are you kidding me? Like, you can’t get sick, you can’t get sick — and we’re going to get sick, I know. I mean, God forbid. If that’s a chance to help reduce, you don’t think twice about it.”

“Pathetic attempt to profit from this pandemic”

Brent Skoda, chairman and co-founder of Urgent Response Network, a coalition that supplies critical PPE to government agencies like FEMA and the Centers for Disease Control and Prevention (CDC), tells Yahoo Life that Salerno’s story demonstrates the desperation of those on the frontlines of the pandemic.

“Doctors are trying to follow protocols they know will prevent COVID-19 from spreading. Their efforts to find alternative PPE supplies should be recognized as a sign of their commitment to provide adequate care for the sick and nothing else,” Skoda says. “Fake suppliers have appeared to take advantage of the desperate in a pathetic attempt to profit from this pandemic. The secondary market has also grown, with a large price premium on purported inventory.”

Salerno believes that a seller like Feldheim “lacks any moral fiber.” And although people may question the doctor’s decision to buy from him and to speak to the media instead of reporting the black-market seller to the FBI, he does appear to have given thought to that alternative.

“I know [the FBI] obviously confiscated [the supplies] and it’s probably going to be, I mean … I’m not a prosecutor, but I imagine they have to hold it for evidence for a certain period of time,” he says. “And these are amazing supplies that we all could use. And now they’re in an FBI holding area.”

Doctor entangled in FBI probe of black-market PPE vendor explains desperation to get supplies 2

Luckily, on April 2, the day after Yahoo Life’s first conversation with Salerno, the DOJ and Human Health Services announced the distribution of the confiscated supplies.

“The Federal Bureau of Investigation discovered the supplies during an enforcement operation by the Department of Justice’s COVID-19 Hoarding and Price Gouging Task Force on March 30 and alerted HHS which used its authority under Defense Production Act to order that the supplies be immediately furnished to the United States,” the report reads. “In addition to the N95 respirator masks, the supplies found included 598,000 medical-grade gloves and 130,000 surgical masks, procedure masks, N100 masks, surgical gowns, disinfectant towels, particulate filters, bottles of hand sanitizer and bottles of spray disinfectant. Specifically, after inspecting the supplies, HHS arranged for the delivery of the PPE to the New Jersey Department of Health, the New York State Department of Health and the New York City Department of Health and Mental Hygiene.”

The DOJ and HHS were unable to provide Yahoo Life with further details of the distribution. The New Jersey Department of Health has yet to respond to Yahoo Life’s request for comment.

And now a frustrated Salerno is left wondering where all those valuable supplies have gone. “I don’t know where they went,” he tells Yahoo Life. “They didn’t call me and say, ‘Hey, Dr. Salerno, we feel bad that you paid 800 percent markup, and thanks to you, we busted this guy in literally two days after speaking to you. Do you need any more masks? Do any of your colleagues need any more masks?’”

As the doctor works through the supply that he initially said would last his practice through the third week of April — now coming to an end — he explains that he has tried buying certified PPE from reliable suppliers in China via social media networks such as LinkedIn.

“The problem is you try to place an order, an order was approved — and then literally, last week, there was an order coming trans-Atlantic and the government seized the order,” Salerno says. “So basically the federal government is now my competitor, but they’re obviously bigger and stronger and more powerful than I am. So it’s really not a competition.”

On Tuesday, an ever-determined Salerno began working on an initiative in partnership with the city council of Newark and Mayor Ras Baraka to test all of the city’s 4,000 first responders for the coronavirus. And while working with the government, he was able to access FEMA supplies — but he remains in need.

“These FEMA masks that we got, they sent us all size extra-small. So what is that going to do for an adult-size head and face?” Salerno asks. “And these masks were obviously forever in some warehouse, not properly stored, because when you take and pull the elastic to put over your head, the elastic falls apart. Talk about insult to injury.”

Despite feeling that all odds are against him, Salerno continues to fight against the coronavirus alongside the clinicians at Salerno Medical Associates, the local Newark government and Rutgers University, where RUCDR Infinite Biologics has created a new saliva-based COVID-19 test granted emergency use authorization by the FDA — all while maintaining minimal protection through unorthodox methods.

“I am repurposing other industry things,” he says, like painting suits for the construction and automotive industries. “You know, those hazmat-looking suits that they use, and paint boots that are supposed to try to protect you, and HEPA filters and 3M masks and things like that that. I’m just repurposing right now,” Salerno says. “I’m just riding on fumes.”

For the latest coronavirus news and updates, follow along at https://news.yahoo.com/coronavirus. According to experts, people over 60 and those who are immunocompromised continue to be the most at risk. If you have questions, please reference the CDC’s and WHO’s resource guides. 

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