Name: Coronavirus in Oklahoma: State cancels PPE buy from company under FBI scrutiny
Brand: oklahoman.com
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Coronavirus in Oklahoma: State cancels PPE buy from company under FBI scrutiny

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Nolan Clay Public safety content is provided for free as a service to our readers during the coronavirus outbreak. More in-depth coverage and enterprise reporting can be found by subscribing to our digital products at . We also offer to stay informed. State health officials had been going ahead with a $9.5 million purchase of personal protective equipment from a new company despite being told it was under investigation by the FBI."We will move forward," the Health Department's chief of staff, Jackie Shawnee, wrote Friday, according to information obtained by The Oklahoman.But, on Monday, health officials abruptly called off the deal."The order with Ceros has been canceled because the state has moved the order to another vendor that is on state contract," spokeswoman Shelley Zumwalt said.The cancellation also came after the company insisted on at least partial upfront payment for the bulk of the purchase, N95 masks. The cancellation was confirmed by the Health Department hours after The Oklahoman inquired about the buy.The terminated deal is the latest example of the extreme steps Oklahoma and other states have been willing to take to find personal protective equipment to deal with the coronavirus crisis. Some say Oklahoma officials are taking too many risks, particularly as the need for personal protective equipment has become less urgent.The new company, Ceros, was incorporated in Wyoming in February and the address for the company contact was an apartment in California. It took the name of a well-known internet service company that has headquarters in New York.An official with the Oklahoma Office of Management and Enterprise Services described the new company as having high risks.Pushing the deal was Gino DeMarco, a deputy tourism director who has become the state's "PPE supply chain leader" during the pandemic.He reported being told by an FBI special agent that Ceros was under investigation for possible "fraudulent activity" involving Chinese ventilator transactions, according to the information obtained by The Oklahoman.He also reported the agent said Oklahoma had been specifically identified as a possible victim of fraud related to the purchase of Chinese ventilators. DeMarco reported he told the agent the state had been in discussions about purchasing Chinese ventilators but ended up buying ventilators made in the United States from a vendor based in the United States.On Friday, he called the deal a "relatively low risk" because Ceros would not be paid until he had personally inspected the "goods on the ground" after they were flown to Oklahoma City."We do need to move on this," he wrote. "The plane is going to be here Monday and we don't want to lose the N95 masks if it actually shows up."In the first of two phone interviews Monday, a Ceros executive, Ryan Cai, said Oklahoma was ordering 2 million N95 masks that will come in in batches over a month. He said Oklahoma also was ordering goggles, disposable gauze and other stuff. He said he and the state were still in discussions because the N95 mask factory wanted payment ahead of time before shipping."I can take some risk. I can't take the whole risk," Cai said.He said he was not aware that the FBI was asking questions about ventilator purchases involving his company."What? About me? I don't know that," he said.In a second interview after the order was canceled, Cai said he couldn't talk about it because it is confidential.Calling the Health Department about Ceros was an Oklahoma City-based special agent with the FBI."We don't comment on investigations," said FBI public affairs officer Andrea Anderson. "We don't confirm or deny the existence of investigations. But it's no secret that the FBI has ... openly communicated with all of our officials to try and make sure that everybody's getting what they need from the right vendors."

Nolan Clay Public safety content is provided for free as a service to our readers during the coronavirus outbreak. More in-depth coverage and enterprise reporting can be found by subscribing to our digital products at . We also offer to stay informed. State health officials had been going ahead with a $9.5 million purchase of personal protective equipment from a new company despite being told it was under investigation by the FBI."We will move forward," the Health Department's chief of staff, Jackie Shawnee, wrote Friday, according to information obtained by The Oklahoman.But, on Monday,...

Coronavirus in Oklahoma: State cancels PPE buy from company under FBI scrutiny

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