Injunction issued against Ala. storm shelter business
MONTGOMERY, Ala. (Legal Newsline) - Alabama Attorney General Luther Strange announced on Tuesday that the Madison County Circuit Court has granted his request for a permanent injunction against the operators of an allegedly fraudulent storm shelter business.
The court also granted receivership and ordered maximum fines against Tornado Masters of Alabama Inc., Leslie A. Holt (the company's chief operating officer), Grady Holt (an employee of the Toney-based company) and SafeSteel Inc. (a company incorporated by the defendants in Tennessee that also does business as Factory Direct Tornado Services).
The court found that Strange's office presented unchallenged and compelling evidence from more than 10 witnesses of allegedly persistent deceptive practices.
"I am pleased and relieved that the court has taken immediate action to protect the consumers of Alabama from an appalling fraud that also presented a significant threat to consumers' lives and wellbeing," Strange said.
"These defendants callously exploited the anxiety of people who did their best to prepare and protect their loved ones from the devastation that has struck at our state through tornadoes and storms.
"Unbeknownst to these consumers, their loved ones are not safer but actually may be even more endangered by the shelters which many sacrificed to pay for. It was vital that these deceptive trade practices be halted, and steps taken to protect our citizens as we head into another season of tornadoes and unstable weather."
The defendants allegedly falsely claimed that their shelters met strict FEMA standards, that they could withstand EF-5 tornadoes and that the U.S. Department of Agriculture had issued grants for their shelters. The court ruled that the evidence established an unreasonable risk of harm to the public and a possible increase in the number of aggrieved customers. Tornado Masters allegedly engaged in willful and continuous violations of the Alabama Deceptive Trade Practices Act.
Of 17 shelters examined by the state's expert, it was alleged that none of them met the standards that have been promised by the defendants. The examinations allegedly showed that some of the shelters could lead to harming occupants on a temperate day.
Under the terms of the permanent injunction, the defendants are forbidden from engaging in any business related to storm shelters, particularly from being involved or participating in the repair, inspection, installation, delivery, sale, advertising, manufacturing, construction or design of storm shelters, safe rooms or similar products.
The court also awarded maximum civil penalties of $30,000 -- $2,000 for each shelter on which the state presented evidence. The court reserved the right to award more penalties for shelters that had not been examined. Additionally, the court appointed a receiver to handle matters related to the assets of the defendants and recovering damages for consumers.
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