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The Federal Trade Commission has referred a complaint to the Department of Justice alleging Adam J. Harmon and two companies he controls falsely told consumers that personal protective equipment they marketed during the pandemic, as well as light fixtures they sold, were made in the United States. The FTC charged Harmon and his two companies, Axis LED Group, LLC and ALG-Health LLC, with violating the COVID-19 Consumer Protection Act, the Made in USA Labeling Rule and the FTC Act. The agencys proposed order would stop them from making deceptive claims that products were Made in USA or, that because they were Made in USA, they provided superior protection from COVID-19. The order also would require them to pay a civil penalty for their past deceptive claims. The claims resolved by the settlement are allegations only, and there has been no determination of liability.Defendants neither admit nor deny any of the allegations in the Complaint, except as specifically stated in the Order.
ALG and its CEO slapped the Made in USA label on masks that were made overseas, and now theyre paying the price, said Sam Levine, Director of the FTCs Bureau of Consumer Protection. As Americans struggle to obtain safe, authentic personal protective equipment, the Commission will use every tool we have to root out false claims and phony labels.
With the onset of the COVID-19 pandemic in early 2020, Harmon began operating under the name ALG-Health LLC, and selling personal protective equipment such as masks, gowns, and gloves. According to the complaint, Harmon and ALG made numerous false and misleading claims that their PPE products were all or virtually all made in the United States, even though the products were wholly imported, or incorporated significant imported materials or subcomponents. These claims and other false statements including that the defendants products were U.S.-origin respirators, certified by the National Institute for Occupational Safety (NIOSH) violated the COVID-19 Consumer Protection Act, the complaint alleges. Specifically, the defendants harmed consumers by:
The proposed order settling the FTCs complaint against Harmon, Axis LED Group, LLC, and ALG-Health LLC prohibits the conduct alleged in the complaint. Harmon and his companies must:
Protecting consumers and honest businesses from deceptive Made in USA claims is a key priority for the Federal Trade Commission. Over the last year, the agency has brought three other cases in this area, Resident Home, Lions Not Sheep, and Lithionics Battery, LLC. Last August, the Commission voted to finalize the Made in USA Labeling Rule, which enables the Commission to seek civil penalties from companies that make false claims. This is the Commissions second action this year to enforce the rule.
The FTCs Enforcement Policy Statement on U.S. Origin Claims provides further guidance on making non-deceptive Made in USA claims.
The Commission is also taking aggressive action to combat COVID fraud. The agency has brought more than a dozen cases against COVID-19 predators under the COVID-19 Consumer Protection Act.
The Commission vote to authorize the staff to refer the complaint to the DOJ and to approve the proposed consent decree was 5-0. Commissioners Noah Joshua Phillips and Christine S. Wilson issued a joint concurring statement.The DOJ filed the complaint and proposed consent decree on behalf of the Commission in U.S. District Court for the Northern District of Ohio.
NOTE: The Commission authorizes the filing of a complaint when it has reason to believe that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Consent decrees have the force of law when approved and signed by the District Court judge.