A Williston businessman delivered nearly 80,000 masks to Central Vermont Medical Center earlier this month to settle claims that he'd gouged the hospital during the early, desperate days of the pandemic.
Vermont Attorney General T.J. Donovan announced the settlement with Big Brother Security Programs owner Shelley Palmer on Monday. Palmer was accused of selling surgical masks at an exorbitant markup in March, when personal protective equipment was difficult for health care providers to procure.
As part of the deal, Palmer also dropped off 10,000 KN95 masks to the Vermont Department of Public Safety for distribution to schools, health care organizations and other eligible groups.
The "face value" of the goods is approximately $80,000, said Christopher Curtis, the AG's public protection division chief. The office had accused Palmer of reaping roughly $100,000 profit on his earlier sales to the hospital.
Palmer, meanwhile, continues to insist that he never ripped off anyone. He told Seven Days on Monday that he has been "legally lynched," and that he agreed to hand over his stockpile of personal protective equipment because publicity around the state's civil lawsuit had ruined his business. He referred to the state's lead attorney on the case as the "dragon lady" because "she'll breathe her fiery breath all over you."
"I was a bail bondsman for 10 years," he said. "I know something about crooks, having hung out with them so much. Am I insinuating that they're crooks? Yes."
Palmer's primary business is transporting physically disabled people to and from the hospital, a service known as non-emergent transport. He started a side hustle selling PPE last spring, purchasing tens of thousands of masks through the Chinese e-commerce site Alibaba to resell locally.
The state accused him of selling 10-cent surgical masks for $2.50 each and labeling them as more protective N95s. Palmer denied misrepresenting them, and said he actually paid 60 cents per mask, which would put his profit from the Central Vermont Medical Center transactions at roughly $80,000.
Once Donovan sued in April, Palmer said his transportation company's main client, the University of Vermont Medical Center, stopped doing business with him. Superior Court Judge Helen Toor later issued an injunction that barred Palmer from selling masks in Vermont. He said he stashed them in New York and other locations, but business tanked.
Palmer claimed the fallout has put him more than $250,000 in debt. He's surrendered his vehicle fleet and laid off his employees. He has not filed for bankruptcy, but said his own application for unemployment benefits is pending.
His financial mess comes despite having received state and federal COVID-19 relief. In late May, while the price-gouging case was already filed, Palmer's company was approved for a $24,595 forgivable loan through the Payroll Protection Program, federal records show. Like most business owners, Palmer said he has applied to have the loan amount forgiven. He said he qualifies for loan forgiveness despite laying off his employees.
Palmer also disclosed to Seven Days that he received an emergency grant of similar size from the State of Vermont.
Yet Palmer will not have to pay a $15,000 suspended monetary penalty that is part of his settlement with the state, so long as he doesn't violate its other conditions. Why? Because Palmer told the AG's office that he doesn't have the money to pay.
Curtis said the suspended penalty should help deter Palmer from future violations, and that his PPE stockpile would provide immediate help during the pandemic. The judge's early rulings in the case helped establish that the state's consumer protection law encompasses price-gouging claims, Curtis added.
Palmer believes the state's crackdown has caused more harm than good.
"The gimps don't have any way to get around," he said, using a pejorative term for his transportation company's physically disabled users.