Bethenny Frankel’s Dark Journey to Find Medical Masks

It was late March, with the coronavirus starting to peak in New York and hospitals already running short on supplies, when Bethenny Frankel, the entrepreneur and reality television star, received an email from a publicist offering her access to 500 million medical masks, or about enough to fill 25 Madison Square Gardens.

Ms. Frankel was intrigued. While spending eight seasons on the “Real Housewives of New York City,” she began flying to places like Guatemala and the Bahamas to aid in disaster relief. Now, with the disaster down the road, she wanted to help. She called the New York governor’s office, and her home state drafted her to find masks.

“There is no mask store,” she said. “I was ready to get them from a guy in Washington Square Park.”

The publicist connected her with the source, an Idaho man named Jake Uhlenkott, who describes himself on LinkedIn as a “Farmerpreneur // Management Consultant // Recording Artist.” Working in her pajamas at her Hamptons home, Ms. Frankel reached out.

“The 500m is real,” he wrote in a text message to her on March 24. “Not for long. But it is definitely real. 100% confidential. Can you secure funding?”

So began Ms. Frankel’s journey into the market for masks, a sort of high-stakes house of mirrors, where lives and millions of dollars were on the line and things were rarely what they seemed.

The coronavirus arrived in America early this year, and demand for hand sanitizer, face masks and other supplies skyrocketed. With suppliers unable to keep up, and federal officials slow to respond, local governments, hospitals and individuals scrambled to compete for the dwindling supply, causing prices to soar and luring both do-gooders and opportunists.

That offer for 500 million masks was enticing but flawed: The supplies were abroad and would take at least a week to arrive. Ms. Frankel’s government contacts needed gear immediately and she was wary of faraway masks, so she asked Mr. Uhlenkott if he knew of any caches already on the continent.

A day later, he told her he had found five million masks made by the manufacturer 3M, the gold standard, in Canada. Ms. Frankel confirmed with New York State officials that they were interested. And like that, a deal was on.

Ms. Frankel, 49, is a fast-talking, sharp-witted businesswoman who became famous by playing that part over 15 years of reality television. On the side, she started her Skinnygirl line of cocktails, jeans and deli meat, which now has more than $50 million in sales a year.

In 2017, she flew to Houston after Hurricane Harvey to give about 1,000 families each $1,000 in aid. Since then, her charity BStrong has expanded its disaster-relief missions to earthquakes in Puerto Rico, hurricanes in Mexico and wildfires in California and Australia. As a result, she knew how to get supplies and had a fat Rolodex of contacts.

So when the coronavirus began to appear in American headlines, celebrities including Billy Joel, Ellen DeGeneres and Charlize Theron began funneling their money to her charity to turn it into masks for hospitals. When word spread that she was buying masks, sellers flooded her with offers.

“Everybody knew a guy who knew a guy,” she said. “You feel like you’re in a Moroccan bazaar, and wherever you’re turning, left and right, everybody is holding shiny objects.”

Many of the offers carried price tags more appropriate for governments than her charity, so within days, she was working with New York State, New York City, Michigan, Arizona, Louisiana and Chicago.

“She did a tweet that basically said, ‘Hey, Michigan, I can help you,’” said Tricia Foster, Michigan’s chief operating officer.

Ms. Frankel promised to secure some of the stockpiles. With her inbox full of strangers, Mr. Uhlenkott, who was introduced by someone she knew, seemed like a decent bet.

Mr. Uhlenkott had started selling masks that week. A pianist and former field director for Rick Santorum’s 2012 presidential campaign, he canceled plans to record his first album in Los Angeles and decamped to his family’s home in the Idaho wilderness when the virus arrived. There, like thousands of other suddenly idle people, he saw a business opportunity in masks.

With so much money on the line, Ms. Frankel’s team asked for credentials. He sent a document introducing his company, Nexus PPE — a nod to the acronym for “personal protective equipment” — and the four men behind it, including a U.S. Army Special Forces veteran and a Harvard graduate. For good measure, Mr. Uhlenkott added: “I’m personal friends with Princess Alexandra of Luxembourg if you need another reference.”

The document said Nexus PPE was established in 2008. Idaho records show that the Harvard graduate’s father did incorporate the company that year — as Nexus Wealth Management, a small financial planner in Boise. On March 25, the day after Mr. Uhlenkott contacted Ms. Frankel, records show he became a company director and changed its name to Nexus PPE. He said later that it was easier than starting a new firm.

While Mr. Uhlenkott tried to secure the five million masks in Canada, his suppliers told him they had found 10 million 3M masks, this time in New York. Officials in Albany wanted those, too, so Ms. Frankel’s team sent him an $82.5 million purchase order for the now 15 million masks, contingent on inspection. It was more than five times the normal price.

For days, New York officials asked to see the goods, and Ms. Frankel offered to send her driver, but Mr. Uhlenkott couldn’t provide an address. There were various excuses related to customs, logistics and an unnamed billionaire in California who supposedly controlled the stockpile.

“What I’m being told is that the owners are nervous about seizures and trying to protect their assets…and asses,” he said in a text message to Ms. Frankel on March 27.

“My patience is running low,” she replied. “I went to bat for you with this whole group. Stakes are high so kick this into gear. I don’t care how.”

Two days later, Mr. Uhlenkott sent blurry photos and a video of boxes in a warehouse that didn’t look like the masks they had agreed upon. Ms. Frankel was suspicious. “You better be able to prove what you have been selling,” she said in a text message.

New York had seen enough. “When you’ve got lives at stake, you’re willing to at least hear these guys out,” said Rich Azzopardi, a senior adviser to Gov. Andrew M. Cuomo. “We got pretty far along with these guys, but no money changed hands.”

In an interview, Mr. Uhlenkott said his original source for the 500 million masks was real and reliable, but to find supply already in North America, he went with a new seller who turned out to be slippery. “It seemed like everything was a shell, offshore, this kind of stuff,” he said of the source. “But at the same time it was like, well, maybe those are the people that actually have the masks.”

Mr. Uhlenkott dropped out. But first, he introduced Ms. Frankel directly to his source. “That was when I got excited,” Ms. Frankel said. “That was when I thought, OK. Now, this is real. Because now we’re actually not talking to some middleman. We’re talking to the actual people.”

The first time they spoke, Ralph Frengel put Ms. Frankel at ease. He was a smooth-talking salesman for a company called Astoria Enterprises. He had plenty of masks available and he seemed like a dealmaker. “It felt legitimate,” she said.

On April 3, Mr. Frengel sent a menu of sorts, including eight separate stockpiles that together totaled 275 million 3M masks. “Let me know what you think you can do from this inventory,” he said in an email.

Ms. Frankel alerted her contacts in government. This time, New York City was on board, as BuzzFeed News reported. They agreed to buy 10 million 3M masks for $66.5 million — a high price — once they were inspected.

But Mr. Frengel and two Astoria colleagues first demanded a purchase order directly from the city, according to emails reviewed by The Times. They also said the money should be put in an escrow account their lawyer controlled, the emails show.

Ms. Frankel and city officials balked. They wanted to see the masks. In an email, the lawyer representing Ms. Frankel’s team told Mr. Frengel that without immediate inspection “we will be forced to conclude, as the City of New York already believes, that the representations made about the existence and number of 3M N95 masks are untrue.”

Mr. Frengel replied that inspections were cumbersome and that he and his Astoria colleagues didn’t appreciate the accusation.

Each time a pallet of masks is inspected, “it then must be re-shrink-wrapped, taken across the warehouse, weighed and the manifest tag must be dated, and updated over and over again,” he said. “The suggestions made yesterday afternoon did not sit well with some of Astoria’s principal investor/owners.”

Three weeks after she was first pitched 500 million masks, Ms. Frankel exited the deal empty-handed. “We all were completely gutted,” she said.

There appear to be three main men behind Astoria Enterprises, and two of them are ex-convicts.

Mr. Frengel, the salesman, was convicted in 1992 for stealing a $100,000 pearl necklace from a jewelry store. “It’s not as bad as it sounds,” he said. The store owed him money and he was strung out on drugs. “Freebasing cocaine,” he said. “Highly addictive.” His records since show repeated run-ins with the law, including a restraining order against him and at least two federal tax liens.

Michael Carnicle, the Astoria official in control of the mask supply, served three years in prison in the 1980s after getting caught with $1 million in counterfeit bills. A federal court later found that he had helped fake certificates of deposits from a Russian bank to prop up a company that wanted to turn the 1990s TV hit “American Gladiators” into a Las Vegas show. Most recently, he went to prison for not filing his tax returns. He was released in January.

Astoria’s chief executive, Lucian Alter, used to own a business duplicating pornography tapes until it burned down in Los Angeles, according to The Los Angeles Daily News in 1990. Mr. Alter disputed that in an interview, saying he supplied the magnetic tape for cassettes.

According to its website, Astoria Enterprises offers “high-quality, cost-effective information technology business solutions and professional consulting services,” language that appears verbatim on several other businesses’ websites. On Twitter, the company describes itself as a “a good listener and just a nice person to hang out with.” A closer inspection suggests they help with gambling on the internet and speculating on foreign currencies.

Mr. Frengel was near Palm Springs, Calif. Mr. Carnicle was in Las Vegas. Mr. Alter was in Tel Aviv. Astoria, however, was registered in Cyprus, the Mediterranean island that has been a haven for money laundering.

When I first reached Mr. Frengel and asked if he sold masks, he replied, “I don’t think so. I’d have to look back through my records.” When I said I had spoken with Ms. Frankel, he admitted he was a mask middleman but denied advertising millions of masks, despite numerous emails showing he did. “I just probably forwarded an email,” he said.

In reality, he was pitching Astoria’s stockpiles around the country. Paul Echevarria, a Florida businessman who manufactures cannabidiol, or CBD, said he went down a weeklong rabbit hole with Mr. Frengel and Astoria for millions of 3M masks supposedly stored in a Miami warehouse. Mr. Echevarria planned to resell the masks to the Florida government and had state officials ready to inspect them, but Mr. Frengel wouldn’t provide an address.

The men behind Astoria gave me purchase orders from the state of Florida that they said came from Mr. Echevarria. Mr. Echevarria said he had never seen the documents. When I sent the files to Florida officials, they replied that the documents were forged and were now in possession of the state attorney general. It was unclear who was behind the forgery.

Ultimately, the Astoria trio gave the same answer on why they would never let prospective buyers inspect what they were selling: They never received formal purchase orders from the governments involved, which they said they needed to protect themselves from scams.

Yet none of the men could say for sure whether the masks they were selling even existed.

“I never saw them. I live in California,” Mr. Frengel said. “I had no reason not to believe.”

Mr. Alter, Astoria’s C.E.O., told me, “Sir, this is something that is really confidential, but yes, we have access to millions of masks.” When I asked him Astoria’s source, he laughed. “Where am I getting my product?” he said. “I think it’s funny.”

Mr. Carnicle was more forthcoming, though his story evolved over two hourlong phone calls.

At first he said that Astoria’s suppliers were construction companies in New York and New Jersey that had stockpiled the gear. Which companies? “They don’t want to be on the front page of The New York Times,” he said. “The government is already looking at them.”

No, Mr. Carnicle said. He hadn’t seen the masks.

Thousands of people have entered the mask market over the past two months, and a large chunk of them have been offered millions of 3M masks. Courtney Enloe, 3M’s head of litigation, said probably all of those cases are frauds.

“The typical scheme is somebody will reach out and say we need $X million up front for Y stash of respirators, and they just never had them,” Ms. Enloe said. “I have been solicited. The head of 3M’s litigation has been solicited.” Over the past several weeks, 3M has filed 10 lawsuits against people claiming falsely to have access to its masks.

Federal authorities have also charged several people in recent weeks, including a Georgia man who demanded upfront payments from the Department of Veterans Affairs for $750 million of 3M masks and other gear that he knew didn’t exist.

Amid all this fraud, there is some good news. Ms. Frankel’s BStrong charity and its partner organization, Global Empowerment Mission, have donated more than two million masks and isolation gowns to hospitals and other groups in all 50 states. They cobbled together supplies from smaller purchases and also closed several larger deals, including one million hazmat suits for New York State and 200,000 surgical masks for New York City.

Over three years of relief work, Ms. Frankel said, she has learned that crises breed corruption. Money is flowing and people are desperate. “It’s so disheartening,” she said. “At the racetrack, you think you might get screwed. But when you’re dealing with the biggest health crisis in 100 years, you have to be a really sick, sick, bad person to exploit that.”

Yet, to Mr. Carnicle, it was Ms. Frankel who was trying to cheat Astoria. He said he reported her team to federal authorities for attempted fraud. “You could be impeding an investigation,” he told me, “or else I would tell you more.”

Susan Beachy contributed research.

Source Article