A Michigan-based scam operation, known as Labor Law Poster Service, has been hit with over $8.2 million in penalties and consumer restitution. This decision comes after a lawsuit by the Washington State Attorney General's Office. King County Superior Court Judge Maureen McKee ordered the company and its principals to cough up a hefty $7.4 million penalty and an additional $850,000 in consumer restitution, as reported by the Attorney General's Office.
The deceptive practices of this company involved sending nearly 600,000 misleading mailings to small businesses in Washington over nearly a decade. According to the Attorney General's Office, these solicitations duped business owners into buying unnecessary workplace posters by imitating official government notices. Before the trial, the court had already judged each mailing a deception, in violation of the Consumer Protection Act, pinning personal liability on co-owner Joseph Fata.
The recent trial hinged on three central issues: Justin Fata's personal liability, the defendants' breach of a 2016 injunction against similar deceptive tactics, and the exact penalties and restitution required. Judge McKee, pointing to the defendants' unrepenting bad faith, levied a $12 fine for each deceptive mailing, culminating in a $7.1 million penalty. On top of that, $850,000 will be returned to the duped small business owners, along with a 12% interest as a pre-judgment addition.
The court also found the company in violation of the earlier court order in two ways: engaging in the prohibited conduct and not circulating the 2016 order to their employees. This isn’t the company’s first rodeo with justice; they've faced legal consequences for similar transgressions twice before, first in 2008 and again eight years later in 2016. The latter incident resulted in an order that the defendants pay $1.2 million in fines, restitution, and attorney fees, as reiterated by the Attorney General's Office.
The team that brought the case to court for Washington included Assistant Attorneys General Zorba Leslie, Kelsey Burazin, and Michael Bradley, as well as a group of dedicated paralegals. With such a significant penalty and restitution ordered, it sends a message to potential scammers that fraudulent business practices will face serious repercussions in the state of Washington.
