GULFPORT, Mississippi — Ocean Springs businessman Ken Ritchey has been indicted by a federal grand jury with multiple counts related to the hoarding of personal protective equipment and price gouging health care providers.
According to the U.S. Department of Justice, Ritchey was at the center of a $1.8 million scheme which included price gouging numerous U.S. Department of Veterans Affairs hospitals.
The justice department said Ritchey, 57, was charged with conspiracy to commit wire fraud and mail fraud, conspiracy to defraud the United States, conspiracy to commit hoarding of designated scarce materials and hoarding of designated scarce materials.
Ritchey made his initial appearance in U.S. District Court Wednesday before Magistrate Judge Robert Myers.
The indictment alleges that Ritchey and others launched the scheme shortly after the first confirmed case of COVID-19 was announced in the U.S. He and others acquired PPE and other equipment from “all possible sources,” including home improvement stores and online retailers.
Due to nationwide PPE shortages and COVID-19 fears, Ritchey “directed sales representatives to solicit health care providers, including the VA, to purchase PPE and other materials at excessively inflated prices through high-pressure sales tactics” and by misrepresenting sourcing and actual costs.
The justice department says Ritchey sold PPE to health care providers who were desperate to acquire the equipment and were willing to pay the exorbitant costs.
The indictment notes that in one instance Ritchey sold N-95 masks to the VA and other health care providers for as much as $25 per mask, despite having acquired the masks at a much lower price.
This isn’t Gulf Coast Pharmaceuticals first run-in with legal troubles.
According to the Associated Press, in 2010, the company lost its pharmacy wholesaler license in Oklahoma and other states after being accused of shipping excessively large amounts of pain killers and relaxants to Oklahoma pharmacies licensed by Native American tribes.
Gulf Coast Pharmaceuticals admitted to selling nearly 14 million doses of three different drugs to one pharmacy in a six-month period, also admitting it did not have procedures in place to monitor suspicious orders or seek a state license before doing business in the state.
The Oklahoma case launched a wave of license revocations in other states where the company had been doing business.
In April, FBI agents raided the Gulf Coast Pharmaceutical office on North Halstead Road, seizing some 280,000 protective masks, along with other PPE. In early December, Ritchey pleaded guilty to a state charge of price gouging.
In addition to Gulf Coast Pharmaceuticals, Ritchey is also owner of the Ritchey commercial building on Government Street just east of the Washington Avenue intersection.
This case was investigated by the FBI’s Jackson Field Office, VA-OIG, and ICE HSI. Principal Assistant Deputy Chief Dustin M. Davis and Trial Attorney Sara E. Porter of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Kathlyn R. Van Buskirk of the Southern District of Mississippi are prosecuting the case.
The Fraud Section leads the Health Care Fraud Strike Force. Since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for approximately $19 billion. In addition, the Health and Human Services (HHS) Centers for Medicare & Medicaid Services, working in conjunction with the HHS-Office of Inspector General, are taking steps to increase accountability and decrease the presence of fraudulent providers.
The public is asked to report COVID-19 fraud, hoarding or price-gouging to the National Center for Disaster Fraud’s (NCDF) National Hotline at (866) 720-5721 or visit The Department of Justice’s NCDF website.
