ALBANY, N.Y. (Legal Newsline) – New York Attorney General Letitia James announced April 12 that a lawsuit against Hauppauge, New York-based Harris Jewelry over allegations of illegal and fraudulent practices will proceed, while the company says the ruling dismissed all but one of James' claims.
The lawsuit was filed in October 2018 against the retailer and financier over allegations that the group targeted service members utilizing illegal and fraudulent practices.
Harris Jewelry appealed to a court with a motion to dismiss the case in its entirety, which was declined. The court allowed the allegations of statutory and common law fraud and violations of the state’s charitable co-venturing laws to move forward. The court also kept alive the attorney general's claims against individual business principals, board members and others.
Among the defendants named in the case are Susan Harris and Beverly Harris as well as Sandi Harris-Pleeter, owners of Harris Jewelry, in addition to board members and executives John Simmermann, David Malane, Richard Baum, and Consumer Growth Partners, a private equity and investment firm.
The attorney general alleges that Harris sold items for more than 10 times the wholesale amount, defrauded service members with false representations of its proprietary financing and failed to properly administer a charitable co-venture.
The lawsuit seeks that defrauded consumers be reimbursed and permanent injunctions be brought against Harris in addition to financial penalties.
Harris Jewelry issued a statement in response to the ruling.
"On April 5th, the New York Supreme Court dismissed all but one of the substantive claims that the New York Attorney General’s office brought against Harris Jewelry. In the ruling, the Court noted that the sole surviving substantive claim is based on a theory that 'may ultimately fail.'
"Harris Jewelry also noted that the Attorney General’s recent public commentary misrepresents the parties who brought it – New York state alone – and its outcome, the dismissal of all but one of the major claims.
"The New York Attorney General has reached the wrong conclusion about Harris Jewelry’s business, and the company will continue to vigorously contest the remaining claims."