Corporate Greed Case Study: Zaappaaz L.L.C. & Its Impact on Public Health

TL;DR: At the height of the COVID-19 pandemic, with Americans desperate for protection, Zaappaaz, L.L.C., and its owner, Azim Makanojiya, launched a massive online sales operation for personal protective equipment (PPE). Zaappaaz lured in panicked consumers with guarantees of immediate shipment, such as “GUARANTEED TO SHIP TODAY” and “IN STOCK-SHIPS SAME DAY.” But these were promises the company knew it could not keep.

A federal investigation found that nearly 60% of PPE orders were shipped late, many arriving weeks after they were promised, while some never arrived at all—leaving consumers, including essential workers and hospitals, without critical supplies. Zaappaaz then systematically refused to provide refunds, trapping customers who had paid for products they desperately needed. This operation allegedly cheated consumers out of as much as $37.5 million, with the court finding the violations “egregious.”

We invite you to read on to understand the full scope of the misconduct and the systemic failures that allowed it to happen.

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Introduction

In the terrifying early days of the COVID-19 pandemic, a company named Zaappaaz saw a business opportunity in the public’s fear. As hospitals scrambled for supplies and families searched for any way to protect themselves, Zaappaaz plastered its websites with bold, reassuring promises for personal protective equipment. Claims like “GUARANTEED TO SHIP TODAY” and “ALL PRODUCTS IN STOCK READY TO SHIP” were a beacon of hope for desperate buyers.

But behind this facade of reliability was a calculated deception. Zaappaaz and its owner, Azim Makanojiya, allegedly built a multimillion-dollar enterprise on promises they could not and did not intend to fulfill, capitalizing on a national emergency to profit from panic. This case reveals the dark underbelly of a system where consumer protection laws are treated as mere suggestions and the relentless pursuit of profit is prioritized over human well-being, even during a global health crisis.

Inside the Allegations: Corporate Misconduct

The federal government’s case against Zaappaaz outlines a flagrant and multifaceted violation of consumer protection laws. Zaappaaz was found liable for breaching both the Federal Trade Commission (FTC) Act’s prohibition on deceptive practices and the federal Merchandise Rule, a regulation specifically designed to protect consumers in online and mail-order transactions.

The violations were not minor oversights; they were systemic and deliberate. First, Zaappaaz solicited orders with shipping promises it had no reasonable basis to make. Internally, Zaappaaz was grappling with severe logistical and supply chain failures, yet it continued to advertise same-day shipping to the public. Second, when it inevitably failed to ship orders on time, it violated the law by not offering customers the mandatory choice: consent to the delay or cancel the order for a full, prompt refund. Finally, by failing to offer this choice, Zaappaaz was legally required to automatically deem the orders canceled and issue refunds—a duty it systematically ignored, instead routinely refusing customer requests for their money back.

The court found these violations so severe that it described them as “egregious.” Evidence showed that Zaappaaz “took advantage of consumers’ desperation to quickly obtain scarce PPE at the onset of a global pandemic with false promises of fast, risk-free PPE deliveries when speed of delivery was of the essence to consumers.”

Timeline of a Crisis-Fueled Deception

Date/Period	Event
Prior to March 2020	Zaappaaz primarily sold customized merchandise like wristbands and lanyards using a drop-shipping model with vendors based in China.
March 2020	As the COVID-19 pandemic hits the United States, Zaappaaz pivots its entire business model to selling high-demand PPE.
March – April 2020	The company floods its websites and promotional emails with false claims like “GUARANTEED TO SHIP TODAY” and “DELIVER IN 24 HOURS,” despite knowing its supply chain is unreliable.
April 2020	Facing new shipping restrictions from China, the company’s logistical problems intensify. Customer complaints spike from zero in January to 820.
March – Dec. 2020	Over 50,000 PPE orders—nearly 60% of the total—are shipped late. Thousands of others are never delivered at all.
Throughout 2020	Zaappaaz systematically fails to offer delayed customers the legally required option to cancel for a refund. It routinely denies refund requests.
August 2020	The Federal Trade Commission sues Zaappaaz for widespread violations of the FTC Act and the Merchandise Rule.
Post-Injunction	The court finds that the company’s unlawful conduct continued even after it had agreed to a preliminary injunction to stop it.
March 2024	A federal court enters a final judgment, ordering Zaappaaz to pay approximately $37.5 million to redress consumer injury.

Regulatory Capture & Loopholes

This case is a depressing depiction of our economic system where regulations exist on paper but fail in practice. The Merchandise Rule, established to prevent the very abuses Zaappaaz committed, was not a complex or obscure regulation. Its requirements are clear: have a reasonable basis for your shipping claims, and if you fail, give customers their money back.

Zaappaaz’s decision to flout these straightforward rules points to a deeper pathology in neoliberal capitalism: a corporate culture that views regulation not as a moral or legal guardrail, but as a risk to be managed or a cost of doing business. In an environment of weakened enforcement and anti-regulatory political rhetoric, companies can come to believe that the potential profits from breaking the law far outweigh the chances of being caught and meaningfully punished. Zaappaaz operated as if these consumer protections did not apply to them, a gamble that paid off to the tune of millions before the law finally caught up.

Profit-Maximization at All Costs

At its core, the Zaappaaz case is a story about a business model predicated entirely on prioritizing revenue above all else. Every decision appears to have been made through the lens of profit maximization, with no regard for ethical conduct or the well-being of its customers.

The initial pivot to PPE was not an act of public service; it was a calculated move to enter a market with desperate customers and inelastic demand. Zaappaaz continued to make false “in stock” and “same-day shipping” promises because those claims drove sales, even as internal realities made them impossible to fulfill. Most tellingly, the refusal to issue refunds demonstrates a policy where securing a customer’s money was the end goal, and delivering the product was a secondary, and often ignored, concern. This is the logical endpoint of a system that incentivizes profit as the sole metric of success.

The Economic Fallout

The financial consequences of Zaappaaz’s actions fell squarely on the shoulders of American consumers. The court ordered the company to pay approximately $37.5 million to redress the injury it caused—a staggering sum representing money taken from thousands of individuals, families, and organizations.

This figure can be broken down further, revealing the depth of the failure. A total of $12,241,035.69 was for orders that were never delivered at all—products paid for but never received. The remaining $25.3 million was for merchandise that arrived late, often so late that it was useless to the buyer. For example, Susan Alimonti, who worked for a moving company, ordered face shields for her workers but they arrived three weeks late, forcing her to purchase replacements from another vendor in the meantime. The money she spent with Zaappaaz was a sunk cost, a direct financial loss caused by the company’s deception.

Environmental & Public Health Risks

While Zaappaaz did not pollute rivers or land, its actions created a profound and direct public health risk during a national crisis. By failing to deliver promised PPE, Zaappaaz left countless individuals and essential workers unprotected from a deadly virus.

The stories of its customers are harrowing. Amy Russell, a university employee, was tasked with sourcing face shields and gowns for campus police officers. She ordered from Zaappaaz because of its promise of 24-hour shipping, paying extra for the service, but the items never arrived on time. Carol and Larry Faber tried to buy masks for their immunocompromised daughter, a nurse on the front lines, and her hospital co-workers, only to be deceived by false promises of quick delivery. In each case, a broken promise by Zaappaaz meant a real-world exposure risk for those who needed protection most.

Exploitation of Workers

The legal record in this case focuses on consumer harm and does not provide details on Zaappaaz’s internal labor practices. However, it is a well-established pattern in late-stage capitalism that companies engaging in such blatant external deception often foster exploitative internal conditions. The drop-shipping model itself is frequently associated with a race to the bottom, where accountability for labor standards is diffused across international supply chains.

While we cannot speak to the specifics at Zaappaaz, the overarching business philosophy—one of deception for profit—rarely remains confined to customer relations. A system that views consumers as targets for exploitation is unlikely to treat its workers as valued partners. This case serves as a red flag for the kind of corporate culture where worker well-being is often an afterthought.

Community Impact: Local Lives Undermined

The impact of Zaappaaz’s conduct rippled through communities across the nation. It was not just individuals who were harmed, but the very institutions that hold communities together during a crisis. Hospitals, universities, and small businesses were all victims of the scheme.

Mechelle Braswell, an employee at a peanut shelling plant, needed thermometers and gloves to keep her essential workforce safe. Rhiannon Guevin needed PPE for her job, as did Andrew Li. When these businesses and their employees were let down, their ability to function safely was compromised, creating a chain reaction of risk that extended from the workplace to the home. By undermining the public’s ability to acquire essential safety equipment, Zaappaaz’s actions weakened the collective resilience of communities when they were at their most vulnerable.

The PR Machine: Corporate Spin Tactics

In this case, Zaappaaz’s primary “spin” was baked into its sales pitch from the very beginning. The deception was not a tactic used to clean up a mess; it was the business model. Zaappaaz’s websites and mass emails were a finely tuned machine designed to convert public fear into sales revenue.

Claims like “ALL OF THESE PRODUCTS ARE FULLY IN STOCK, READY TO SHIP SAME DAY AND DELIVER IN 24 HOURS” were material misrepresentations designed to create a false sense of security. The court noted that these promises were widely disseminated and were a key factor in consumers’ purchasing decisions. When confronted by angry customers, Zaappaaz’s tactic was not to apologize or make amends, but to deny, delay, and refuse refunds, doubling down on the initial deception.

Wealth Disparity & Corporate Greed

The $37.5 million in consumer harm is a brutal symbol of wealth transfer fueled by corporate greed. This was not value created or a service rendered; it was money taken from ordinary people and institutions under false pretenses and funneled to a private company and its owner.

During a time of widespread economic precarity, when millions of Americans faced unemployment and financial distress, Zaappaaz allegedly saw an opportunity for enrichment.

The act of charging customers extra for “rush shipping” that Zaappaaz knew it could not provide is a particularly cynical example of this greed. This case is a microcosm of a larger economic system where crises are often seen by a select few not as tragedies to be mitigated, but as opportunities for extraction and profit.

Global Parallels: A Pattern of Predation

While this case centers on one company, the behavior it represents is not unique. In economic systems that reward aggressive growth and sideline regulation, crisis profiteering is a recurring theme. Across different sectors and countries, from price gouging on essential medicines to peddling sham financial products after a market crash, the pattern is eerily similar.

A company identifies a vulnerable population facing a crisis, creates a product or promise to exploit their desperation, and then erects barriers to accountability.

The specifics of this Zaappaaz case—leveraging a pandemic and using e-commerce as the vehicle for deception—are modern, but the underlying predatory impulse is a timeless feature of unchecked capitalism. It demonstrates a global pattern where moments of collective suffering are viewed by some as singular opportunities for private gain.

Corporate Accountability Fails the Public

On the surface, a $37.5 million judgment and a permanent injunction appear to be a victory for accountability.

However, a closer look at the remedies reveals the structural limitations of our justice system in truly holding corporations to account. The owner of Zaappaaz faced no criminal charges described in this civil case, allowing the architect of the scheme to escape personal liability beyond the financial judgment against his company.

Furthermore, the redress plan itself places an undue burden on the victims. While customers who never received their products are slated for automatic refunds, the tens of thousands who received late and often useless shipments must affirmatively request their money back from the FTC. Any funds that go unclaimed will be returned to Zaappaaz.

This means the company could potentially retain a portion of its ill-gotten gains simply due to consumer inaction or ignorance—a system that rewards the perpetrator for its victims’ exhaustion.

Absolutely unacceptable imo

Pathways for Reform & Consumer Advocacy

The flagrant nature of Zaappaaz’s violations highlights critical needs for systemic reform. This case was not the result of a legal loophole but of a blatant disregard for existing law, suggesting that the penalties for such misconduct are not a sufficient deterrent. Stronger, more automatic penalties for consumer fraud, particularly during national emergencies, are essential.

Moreover, the process for consumer redress must be streamlined. Forcing victims to navigate a claims process to get their money back is an unnecessary hurdle. Reforms should move toward automatic, full refunds in clear-cut cases of fraud, placing the administrative burden on the fraudulent company, not the public. Finally, this case underscores the vital role of federal regulators like the FTC and the need to ensure they are fully funded and empowered to act swiftly and decisively to protect the public.

Legal Minimalism: Doing Just Enough to Stay Plausibly Legal

Many corporations in the modern economy practice “legal minimalism,” operating in the gray areas of the law and adhering to the letter while violating the spirit. Zaappaaz, however, represents a more brazen approach. The company did not merely bend the rules; it shattered them.

The court’s findings describe a company that knowingly and repeatedly violated clear, established federal regulations. This behavior is symptomatic of a corporate culture that has lost all respect for regulatory authority, viewing consumer protection laws as hollow threats. It is a gamble on the inefficiency of enforcement—a bet that the profits earned from lawbreaking will accumulate faster than the slow-moving wheels of justice can catch up.

How Capitalism Exploits Delay: The Strategic Use of Time

Time was a weapon for Zaappaaz. The company’s business model relied on the crucial delay between a customer placing an order and their realization that the promised same-day shipping was a lie. In that gap, Zaappaaz had their money, and the customer had only a false promise.

This exploitation of time extended to the company’s refusal to issue refunds. By denying cancellation requests, it forced customers into a waiting game, hoping they would eventually give up. Even the legal process itself involves delay, allowing the company to hold onto its revenues for years while the case proceeds.

In a system where time is money, these strategic delays are not just a byproduct of the process; they are a direct source of ill-gotten profit.

The Language of Legitimacy: How Courts Frame Harm

Throughout the legal battle, the language used to describe Zaappaaz’s actions often sanitizes the reality of the harm. In its filings, the company referred to the FTC’s request for consumer redress as a mere “‘damages’ claim.” The FTC had to correct the record, pointing out that Section 19 of the FTC Act explicitly authorizes the “refund of money”—a distinct and more fitting remedy.

This subtle shift in language from “refunding money that was taken” to “paying damages” is significant. “Damages” suggests a negotiable harm that can be calculated and compensated, while “refund” implies a fundamental right to get one’s money back when a transaction is based on deceit. This legal framing, while technically precise, can obscure the simple, moral truth of the situation: the company took money for something it didn’t provide as promised and should have given it back.

Monetizing Harm: When Victimization Becomes a Revenue Model

Zaappaaz’s business was ultimately monetizing fear and desperation. The company’s revenue model was built directly on the suffering caused by the pandemic. It identified a point of extreme public vulnerability and devised a strategy to extract cash from it.

This is a textbook example of disaster capitalism, where harm is not a negative externality to be avoided but is the very resource being mined for profit. By taking payment for goods it could not deliver on time and then refusing refunds, the company effectively turned its customers’ victimization into its primary revenue stream. The harm wasn’t a bug in the system; it was the feature.

Profiting from Complexity: When Obscurity Shields Misconduct

Corporate structures are often intentionally complex, creating a web of entities that can make it difficult for consumers to identify who is truly responsible. The legal filings identify the defendant as “ZAAPPAAZ, L.L.C., agent of WBpromotion.com, agent of WB Promotions, Inc., doing business as Wrist-Band.com, doing business as Customlanyard.net.”

This nesting doll of business names, while not illegal, creates a confusing landscape for the average consumer trying to file a complaint or seek a refund. It diffuses responsibility and can shield the ultimate beneficiaries of the scheme from initial scrutiny. In late-stage capitalism, such opacity is often a strategic choice, designed to frustrate accountability and protect the architects of misconduct.

This Is the System Working as Intended

It is tempting to view the Zaappaaz case as an aberration—a single “bad apple” spoiling the bunch. But to do so would be to miss the point. This case is not an example of the system failing; it is an example of the system working exactly as designed when the pursuit of profit is the supreme value.

In an economic framework that incentivizes growth at all costs and treats regulation as an obstacle, a company that exploits a public health crisis is not an anomaly; it is a logical outcome. Zaappaaz’s actions were the rational, albeit illegal, result of a set of incentives that rewards predatory behavior. This case is a powerful reminder that without strong ethical guardrails and even stronger enforcement, the profit motive will inevitably lead to immense social harm.

Conclusion

The case of the United States vs. Zaappaaz is more than a legal dispute over shipping delays and refunds. It is a story about what happens when corporate greed intersects with a moment of profound public vulnerability. It is about the real, human cost of a business model built on lies—the police officers left without protection, the immunocompromised nurse put at risk, and the thousands of Americans who were cheated while trying to keep their families and co-workers safe.

The final judgment, while significant, cannot fully repay the social trust that was broken. This case serves as a damning indictment of a corporate culture that views a global pandemic as a market opportunity and a legal system that struggles to provide swift, comprehensive justice for victims. It is a clear and urgent call for stronger regulations, tougher enforcement, and a fundamental re-evaluation of a system that too often protects corporate profits over public health.

Frivolous or Serious Lawsuit?

The lawsuit brought against Zaappaaz by the Federal Trade Commission was unequivocally serious and essential. It was initiated by a federal agency to address widespread, documented harm affecting tens of thousands of consumers during a declared national emergency.

The court’s findings of “egregious” violations, the issuance of a permanent injunction, and the $37.5 million judgment for consumer redress all testify to the gravity of the misconduct.

This was not a frivolous claim but a necessary enforcement action to halt a predatory scheme and hold a company accountable for capitalizing on public fear and endangering public health. It represents a legitimate and crucial exercise of regulatory power in defense of the American people.

The DOJ has a press release about this scam: https://www.justice.gov/archives/opa/press-release/file/987211/dl?inline=

There is also this link from the FTC’s website about this corporate fraud: https://www.ftc.gov/legal-library/browse/cases-proceedings/202-3136-zaappaaz-llc

💡 Explore Corporate Misconduct by Category

Corporations harm people every day — from wage theft to pollution. Learn more by exploring key areas of injustice.

• 💀 Product Safety Violations — When companies risk lives for profit.
• 🌿 Environmental Violations — Pollution, ecological collapse, and unchecked greed.
• 💼 Labor Exploitation — Wage theft, worker abuse, and unsafe conditions.
• 🛡️ Data Breaches & Privacy Abuses — Misuse and mishandling of personal information.
• 💵 Financial Fraud & Corruption — Lies, scams, and executive impunity.