JPMorgan Chase has sued the state of California on Thursday for $5.9 million in legal fees, resulting from the bank’s intervention to save the state from a dubious purchase of N95 face masks early in the Covid-19 pandemic.

According to the report in Courthouse News, the suit, filed in a Sacramento state court, claims the bank was involved in litigation by the medical supply company purportedly selling the face masks to California, after JPMorgan Chase raised concerns about the more than $456 million transaction.

JPMorgan Chase seeks to recover the legal fees generated defending itself from the medical supplier’s lawsuit.

According to the allegations of the complaint, John Thomas introduced himself to high- level California officials, including the State Controller, and said that his company, Blue Flame Medical LLC, could deliver 100,000,000 N95 masks.Over the next few days, the State Controller’s Office (SCO), the Governor’s Office of Emergency Services (OES), and California Department of General Services (DGS) corresponded with Blue Flame about a potential transaction.

DGS prepared a purchase order for 100,000,000 N95 masks, and Blue Flame prepared an invoice. The total purchase price was $609,161,000 and 75% prepayment was required. It then tried to issue a $456,888,600 wire (constituting approximately 75% prepayment) to Blue Flame on March 25.

During its “diligence in reviewing the transaction,” the bank alerted the state to concerns stemming from its internal investigation of the wire transfer. The complaint claims that JPMorgan Chase learned from Blue Flame’s bank that “Blue Flame’s account was new, that the account had been opened by a political lobbyist and that the size of the wire was unusual for this client.”

Made aware of the concerns about Blue Flame, California reversed course on the wire transfer. JPMorgan Chase claims the funds were returned to the state the same day the wire was initially approved.

The complaint cites multiple statements from the involved state officials at a California Assembly oversight hearing in May 2020 in which they credited JPMorgan Chase for helping retrieve the funds and alerting them to some of the concerns regarding Blue Flame.

In September 2021, a federal judge in Virginia granted summary judgment to Blue Flame’s bank, compelling JPMorgan Chase to indemnify the bank for their losses in the transaction between Blue Flame and California. JPMorgan Chase settled with the bank, agreeing to pay $5.9 million in attorneys’ fees and expenses.

It now seeks to recover that sum from the State of California after the state declined to reimburse the bank.

Blue Flame has faced multiple probes into its financial dealings, including allegations that it failed to deliver products to state governments who purchased masks and other personal protective equipment. These include a criminal inquiry by the U.S. Department of Justice and a congressional committee investigation.