Judge denies BJ’s motion to dismiss Alex and Ani suit alleging jewelry resale fraud
COURTESY ALEX AND ANI LLC
ALEX AND ANI has sued three Colorado companies that the jewelry manufacturer claims resold its popular jewelry to BJ's Wholesale Club after obtaining the merchandise from Alex and Ani at a discount through deceptive means. Eight defendants in total are named in the suit.
PROVIDENCE – Alex and Ani LLC’s lawsuit in U.S. District Court alleging that eight defendants conspired to secure discounted Alex and Ani jewelry on behalf of retail distributors, and then later fraudulently resold the jewelry to BJ’s Wholesale Club Inc., has been allowed to proceed.
According to court documents, in May 2013 a BJ’s representative contacted Michael David Foonberg, the president and owner of Roxy Inc., Genesis Sales Corp. and JJ&M Corp., to procure Alex and Ani jewelry for resale at BJ’s. Foonberg submitted an application to Alex and Ani to sell their jewelry to BJ’s as a third-party affiliate, but Alex and Ani rejected the application.
Roxy and Genesis then allegedly contracted Travis Brody of Elite Level Consulting LLC, agreeing to pay Brody a commission for each piece of Alex and Ani jewelry he obtained for the companies. Over the course of several months in 2013, Alex and Ani sold Brody and ELC some 26,668 pieces of its jewelry under Brody’s assertions that ELC would offer the jewelry as promotional gifts at high-scale events.
Email communications cited in court documents show that Brody assured Alex and Ani that its product would be used for promotional purposes only and would in no event be resold. After securing the jewelry, however, Brody allegedly arranged for the jewelry to be shipped to Roxy and Genesis in Colorado.
In September 2013, Alex and Ani discovered that the merchandise it had sold to Brody was being sold at discounted prices at BJ’s locations in Rhode Island and Massachusetts and requested that BJ’s stop selling the jewelry. When BJ’s declined, Alex and Ani pursued legal action.
In total, Alex and Ani sold the 26,668 pieces of jewelry to Brody for approximately $250,000, a quarter of the merchandise’s estimated retail value of $1 million, the court documents stated.
In a ruling issued July 18, U.S. District Court Judge William E. Smith called the case “a bewildering ballad of bungled bangle banditry” and denied BJ’s motion to dismiss the case against the retailer. Smith also allowed most of the lawsuit’s claims against the other seven defendants to go forward.
Gregg Perry, a spokesman for Alex and Ani, issued the following statement on Monday:
“We are pleased with the decision by the court allowing this lawsuit to go forward against all of the defendants. The company will continue to vigorously defend and protect the Alex and Ani brand and we will turn to the courts to do so when we believe the facts, such as those in this case, require us to do so. Alex and Ani looks forward to presenting its case in full before the court.”
Defendants in the case include Brody and ELC, Roxy Inc., Genesis Sales Corp., JJ&M Corp., BJ’s Wholesale Club, and J. Jonathan Weiss of Luxury Business Jets LLC, who allegedly connected the three companies with Brody and ELC after an inquiry by a JJ&M employee.
To read Smith’s full ruling on the motions for dismissal, click HERE.
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