Michael Caridi defrauded one of Quebec’s largest hospital networks during the onset of the COVID-19 pandemic by selling millions of dollars’ worth of substandard respirator masks, an Ontario judge has ruled.
In March, 2020, The Quebec City hospital network, commonly known as CHU, agreed to pay Mr. Caridi’s company US$13.7-million for three million N95 masks that were certified by the U.S. National Institute for Occupational Safety and Health. Instead, the five-hospital network received boxes of KN95 masks that were clearly labelled as “not for medical use,” according to an Ontario Superior Court of Justice ruling dated July 9.
In a 68-page decision, Justice Herman J. Wilton-Siegel found Mr. Caridi – a previously convicted fraudster and former chief executive officer of cannabis-producer-turned-personal-protective-equipment-seller Tree of Knowledge International Corp. – personally liable for the deceit. Because CHU has thus far managed to recover roughly US$2.5-million through settlements with other defendants in the case, Mr. Caridi was ordered to pay the balance of roughly US$11.2-million.
His global assets have been frozen since December, 2020, and Tuesday’s ruling means the health care network can now begin the process of claiming those assets to recover its losses.
John Pirie, a lawyer for the hospital network, said: “Our client is pleased with this trial result. We are mindful that related proceedings are ongoing and we have no further comment at this time.”
Mr. Caridi, who represented himself at the proceedings, could not be reached for comment.
During the trial, Justice Wilton-Siegel found Mr. Caridi provided inconsistent testimony. Throughout the entire pretrial period and through the trial itself, Mr. Caridi’s position was that CHU had contracted for KN95 masks that were manufactured to NIOSH standards rather than NIOSH-certified N95 masks.
“He then changed his position on the last day of the evidentiary portion of the trial,” the decision said.
Mr. Caridi’s new claim was that he did, in fact, order NIOSH-certified N95 masks, but that he was “let down” by his supplier.
“Caridi did not offer any explanation for this change of position,” the decision said. “Further, in his testimony, he sought to maintain both positions.”
Mr. Caridi, whose home address is an 8,000-square-foot mansion next to an exclusive country club in Greenwich, Conn., is also being sued by the U.S. Securities and Exchange Commission. The SEC case, filed in September, 2023, accuses Mr. Caridi of running a “fraudulent scheme” in which he made “false and misleading” statements in 2020 about Tree of Knowledge having completed a successful pivot from cannabis to personal protective equipment.
According to the SEC, Mr. Caridi paid a “substantial portion” of the money received from CHU “to himself, his family, and his business associates.”
Justice Wilton-Siegel’s decision said Mr. Caridi personally received at least US$1.1-million from the money paid by the hospital network.
The SEC wants Mr. Caridi permanently banned from serving as an officer or director of any SEC-registered company and from participating in any penny stock offerings. The SEC is also seeking an undisclosed amount in fines.
Mr. Caridi left Tree of Knowledge in October, 2020. The company later changed its name to Optima Medical Innovations Corp. and was placed into receivership in December, 2023.
He was previously convicted of fraud in 2006 by a New York court. That conviction related to a contract Mr. Caridi had received from the U.S. Department of Housing and Urban Development requiring him to pay workers a stipulated wage, which he failed to do.
Mr. Caridi pleaded guilty to filing a “false instrument,” paid US$102,000 in fines and was temporarily banned from bidding on U.S. federal government contracts.
In a U.S. Department of Justice document from February, 2020, Mr. Caridi is described as a hedge fund manager and long-time business acquaintance of former U.S. president Donald Trump.