Penn State Health has filed a lawsuit against Ki-Jana Carter after the former Nittany Lions running back and his company allegedly failed to make good on a $2.4 million deal to provide masks amid the COVID-19 pandemic.
According to the suit filed in Dauphin County earlier this month, Carter and his Florida-based firm, ByoGlobe LLC, approached Penn State Health in late March with an offer to deliver personal protective equipment including 400,000 N95, KN95 and surgical masks.
‘[Penn State Health] never received a single mask from ByoGlobe or its supplier,’ attorney Anthony Lucido wrote in the complaint.
The lawsuit seeks $935,000 of the payment that Penn State Health says still has not been refunded.
Carter, ByoGlobe’s CEO, allegedly told Penn State Health in March that he could obtain 3M masks being manufactured in China and deliver them by April 15.
When the date came and went, the lawsuit claims, Carter said COVID lockdowns prevented the masks from being shipped from his source in Norway, but that instead they were ‘en route’ from an alternate source in India on April 20.
By the end of April, according to the filing, it became “abundantly clear” to both parties that ByoGlobe couldn’t pull through with the deal and make good on the contract.
“Upon information and belief, ByoGlobe, at all time material to the parties’ contractual agreement, lacked the ability, resources and/or professional expertise to fulfill its obligation to supply the PPE ordered and paid for by [Penn State Health],” the suit reads.
The health network said it canceled the order on May 7 and demanded a full refund.
Penn State Health doesn’t believe any equipment ever arrived in the United States. If it did, according to the suit, Penn State Health never received any additional information, shipping updates, or statuses.
In total, the $2,414,500 contract would’ve consisted of three separate purchase orders of masks and personal protective equipment.
Carter and ByoGlobe did not hold the money in escrow with legal oversight, which they had agreed to do until the orders were fulfilled, Lucido wrote, and no performance bond agreement was executed by ByoGlobe or its suppliers
‘Penn State Health does not know where $2,414,500.00 it wired to ByoGlobe ultimately went,’ Lucido wrote.
ByoGlobe made three payments returning money to Penn State Health: $1 million on May 15, $300,000 on May 29 and $179,000 on July 5. No payments were made after that, according to the filing, though throughout July and August Carter allegedly told the health system he had business deals in the works that would allow ByoGlobe to pay off the remainder ‘instantly’ and ‘the next week.
The $935,000 Penn State Health seeks represents ByoGlobe and Carter’s “improperly retained” outstanding principal balance, according to the lawsuit.
The suit alleges the agreement’s failure resulted in breach of contract, negligent and intentional misrepresentation, unjust enrichment. Penn State Health also asked the court to make Carter personally accountable for repaying the debt.
Onward State was unable to obtain comment from Carter or his attorneys Monday.
StateCollege.com’s Geoff Rushton contributed to this report.