(UnhappyFranchisee.Com) Stratus Building Solutions unit franchise owners have filed suit against the embattled franchisor, its Master franchisees and executives alleging violations of the Racketeer Influenced and Corrupt Organizations Act (RICO).
See the press release here: STRATUS BUILDING SOLUTIONS Sued by Franchisees for RICO Violations
Read the RICO petition here: RICO complaint against Stratus Building Solutions (PDF)Petition
See all our related posts here: Stratus Building Solutions
See the list of Defendants and an excerpt from the complaint below.
IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MISSOURI
JOSE TORRES, GUADALUPE CLEMENTE, LUZ WALKER, CHRISTINA BEITER, and ANTONIO CARMONA,
Individually and on behalf of all others similarly situated others
|SIMPATICO, INC,STRATUS FRANCHISING, LLC
PETER FRESE, JR.
PHSCCH SBS, LLC
STEVAN R. BUTCHER
JAMES VAN DYKE
JEFFREY B. AIBEL
|MICHAEL FAZIOAMY LUNDSTRUM
KNUTSON/GOLDSMITH ENTERPRISES, LLC
PAUL L. KNUTSON
SUNSHINE INVESTMENT GROUP, INC.
RICHARD M. BARAN
|MARK LINDAMANVINCE DUNSTON
TJM ASSOCIATES, INC
Here is an excerpt/overview of the lawsuit against Stratus Building Solutions, its Master Franchisees and employees:
This is a class action brought by unit franchisees of the Stratus Building Solutions franchise system (“SBS”) arising from the illegal business scheme of SBS and its web of affiliated entities and individuals who control and operate the SBS franchise system (collectively, all the “Defendants”). Through this scheme, Defendants fraudulently induced Plaintiffs and the Class to purchase a cleaning franchise and thereafter exploited their control and economic power in order to extract exorbitant and unjustifiable payments and expenditures from their franchisees. As a result, Defendants reap grossly inflated sales and profits, creating an illusion of corporate growth and business prosperity while causing substantial, permanent, irreparable financial harm to the franchisees.
SBS’s illegal scheme consists of two primary components. First, SBS engages in a policy of fraudulently and deceptively inducing franchisees to purchase SBS franchises by intentionally misrepresenting the true nature of the contractual relationship as well as the financial prospects for the franchisee and their likelihood of success.
Second, SBS further takes advantage of its franchisees through other illegal, deceptive and fraudulent means, including but not limited to its willful practice of: (a) saturating geographic areas with more franchise than the area could reasonably support, (b) through grossly underpricing the service work to be provided by the franchisees, (c) through the deceptively churning the service accounts between the franchisees, and (d) charging illegal, undisclosed, inflated fees/charges to the franchisees in order to reduce the franchisees‟ income.
The fraudulent intent underlying SBS’s scheme of deceptively luring franchisees to participate in its system and therefore extracting payments, franchise fees, and cleaning contract income is demonstrated by its pattern of behavior when the inevitable franchise failures come to pass. In this manner, SBS suffers no loss. SBS executes the same scheme against the new franchisees to continue the illegal scheme of increasing revenues of the backs of those with no control.
Plaintiffs bring this action alleging violations of: (a) the Racketeer Influenced and Corrupt Organization (“RICO”) Act, 18 U.S.C. § 1962(c). Plaintiffs seek damages to remedy Defendants‟ unconscionable, fraudulent, and unlawful practices in connection with the operation of its franchise scheme.
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Tags: Stratus Building Solutions, Stratus Building Solutions franchise, Stratus Building Solutions RICO, Stratus Building Solutions lawsuits, Jon Fortman, Jonathan Fortman, Dennis Frese, Dennis Jarrett, janitorial franchise, commercial cleaning franchise, franchise fraud, franchise scams