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Santa Monica Spa Owner Gets Probation for Price Gouging Mask Scheme

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By Lookout Staff

August 26, 2021 -- A Santa Monica spa owner charged with hoarding nearly 20,000 N95 masks during the initial months of the Covid pandemic was sentenced to three years probation Thursday.

Niki Schwarz, 56, a Santa Monica resident and owner of Tikkun Holistic Spa, was also ordered to pay $32,071.30 in restitution and a $25 special assessment, according to City News Service.

In addition, U.S. Magistrate Judge Jean P. Rosenbluth imposed the maximum $100,000 fine allowed for the federal misdemeanor count of hoarding and price gouging.

Schwarz, who pleaded guilty in January, faced a statutory maximum sentence of one year in federal prison, according to federal officials.

Sentencing papers obtained by City News said Schwarz “is a small business owner from an affluent family who took advantage of the fear that gripped our nation at the beginning of the COVID-19 pandemic.”

In a plea agreement last October, Schwarz admitted she began accumulating N95 respirators in February "in anticipation of a shortage that would be caused by a global pandemic resulting from the spread of the novel coronavirus," prosecutors said.

Between early February and the end of June, Schwarz accumulated nearly 20,000 N95 masks manufactured by 3M with a list price ranging from $1.02 to $1.27 and by Alpha Pro with a list price of 86 cents.

Schwarz then resold the masks for as much as $15 each, according to the plea agreement.

She did so "with knowledge that masks had been designated as scarce materials and with knowledge that accumulation of the designated materials to resell in excess of prevailing market prices was unlawful,” the plea agreement states.

Schwarz continued selling the masks after an associate informed her on March 1, 2020 that she was going to stop selling them because she believed it was crime that could result in one year in prison.

Defense attorney Victor Sherman painted a different picture of Schwarz, who is married to a surgeon, saying she sold the masks “to help others, especially her employees and customers.” according to court papers cited by City News.

Schwarz believed that wearing surgical masks was “central to controlling coronavirus in the United States,” Sherman said.

"Niki’s conduct arose out of a solitary campaign to protect other people’s health,” he wrote.

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