RICO Class Action Filed in NY Over Alleged Counterfeit Nitrile Glove Scheme

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A proposed RICO class action details what’s alleged to be a racketeering scheme involving the fraudulent sale of and refusal to refund the total funds paid for supposedly counterfeit nitrile gloves amid the COVID-19 pandemic. 

The 20-page lawsuit alleges Keter 13 Capital, LLC; ATN 1 Express, Inc.; and three individuals capitalized on the pandemic by posing as legitimate vendors of nitrile gloves while demand and interest in the product were at their peak before providing the plaintiff a shipment of counterfeit goods that fell short of appropriate safety and sanitary standards. 

The plaintiff, a New York resident, claims to have agreed to pay the defendants $345,000 for an order of 30,000 boxes of gloves, with 100 pairs of gloves in each box. Per the suit, the plaintiff and the defendants agreed to a $284,000 deposit, with the remaining balance to be owed and paid upon delivery to a Doral, Florida warehouse, where the plaintiff was to have someone inspect and approve the shipment before accepting delivery. 

Although the plaintiff wired the deposit to an account held by two of the individual defendants on March 12, 2021, and a partial shipment of the nitrile gloves was delivered to the Doral warehouse, inspection of the products revealed them to be both counterfeit and short on the agreed-upon number that was ordered, the lawsuit alleges. 

“It was represented to Plaintiff that each box of gloves would contain one hundred (100) gloves; instead, each contained only thirty (30) gloves,” the complaint says. “There were only a total of 17,230 boxes.”

The case claims that although the plaintiff immediately contacted two of the defendants to reject the delivery and demand a refund, indicating that it was not in compliance with the agreed-upon contract between the parties, the defendants, despite retaking possession of the nitrile gloves, returned to the plaintiff only $75,000, well short of the deposit the man paid upfront. 

“Thereafter, [Defendants] refused to return the remaining balance of $209,000.00, after requests and demands from Plaintiff,” the suit alleges. 

From there, the defendants “began to evade and avoid contact and communications with the Plaintiff” regarding the rest of the money they owed, the lawsuit says. Per the complaint, the plaintiff contacted his bank to report the alleged fraud and misrepresentation, and the bank shared that two of the defendants wired a little more than $159,000 to a defendant named David Zion, the case says. 

After discovering the transfer to Zion, the plaintiff’s bank froze the account into which the money was transferred, and thereafter Zion assumed the debt owed to the plaintiff under an agreement by which Zion would transfer the $159,375 owed back to the man as well as guarantee “material assistance” in recovering the remaining $55,000.00 balance owed by the other defendants, the lawsuit claims. Zion, according to the case, represented that he and the corporate defendants were authorized by the two other individual defendants to take and hold in escrow, as collateral, roughly $75,000 worth of jewelry and other valuables held by a pawn shop. 

“The aforesaid valuables were property of Defendants Levy and Abeckaser,” the suit claims. “Defendant Zion and through the Zion companies, would sale [sic] the remaining jewelry and pocket the profits of what was left after paying the Plaintiff.” 

Per the suit, Zion represented that $10,000 would need to be procured to retrieve the valuables from the pawn shop. The plaintiff and Zion agreed to split the cost of the $10,000 until the valuables were recovered, the complaint claims. 

Although Zion represented that if the other two defendants did not return the $55,000 within 60 days from May 6, 2021, their valuables would be sold as collateral and the money from the sale would be returned to the plaintiff with interest, the defendants have not transferred back to the man the rest of the deposit paid for the allegedly counterfeit nitrile gloves, the lawsuit alleges. 

“To date, all named Defendants have refused and failed to refund Plaintiff any of the aforesaid monies due and owing to him by virtue of the contracts between Plaintiff and the Zion Defendants and the contract between Plaintiff and Defendants Levy and Abeckaser,” the complaint alleges. 

The lawsuit claims the defendants have violated the federal Racketeering Influenced and Corrupt Organizations Act by operating as a continuous enterprise in their failure to turn over money alleged to be rightfully owed to the plaintiff and potentially to proposed class members.

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