PHILADELPHIA – A retailer of personal protective equipment alleges it was fraudulently induced to spend nearly $2 million in ordering a purchase of more than 151,000 COVID-19 test kits, but says it never received the kits or a refund.
American Environmental Enterprises, Inc. (doing business as “TheSafetyHouse.com”Peripheral Vision) filed suit in the U.S. District Court for the Eastern District of Pennsylvania on Feb. 23 versus Manfred Sternberg, Esq., and Manfred Sternberg & Associates, P.C., and Charlton Holdings Group, LLC and Samuel Gross.
“On or about Jan. 21, 2022, Safety House agreed to purchase 151,200 iHealth COVID-19 Antigen Rapid two-pack test kits from CHG and its managing member, defendant Gross, for a payment of $1,965,600. Defendants represented and promised to Safety House that they could sell and quickly deliver the COVID test kits, because they alleged they had access to the COVID test kits on the ground, ready to sell, in the United States,” the suit says.
“The agreement required plaintiff to deposit the $1,965,600 purchase price into the attorney escrow account of the Sternberg attorney defendants. These funds were not to be released from escrow until after a bill of sale was delivered to plaintiff and the COVID test kits were delivered to a common carrier for delivery to plaintiff, and the bill of lading and shipping documents also delivered to plaintiff.”
The plaintiff says after making the requested deposit, it never received the necessary shipping documents, the test kits (which it was then unable to provide to its customer, an unnamed public school district) or a refund of the $1.965 million from the defendants.
“Plaintiff believes and therefore avers defendants had no ability to provide plaintiff with the COVID test kits and intended, instead, to abscond with plaintiff’s $1,965,600. Plaintiff and plaintiff’s counsel each demanded the immediate return of the $1,965,600 purchase price. To date, however, the $1,965,600 purchase price has not been refunded to plaintiff, and the COVID test kits have not been delivered,” the suit states.
“As a result of defendants’ wrongful conduct, plaintiff is being forced to locate and purchase COVID test kits from other sources to fulfill its contractual obligations to plaintiff’s customers and has incurred damages in doing so. The conduct of defendants was intentional and knowing and deliberate, and so outrageous and extreme, so as to entitle plaintiff to an award of punitive damages.”
For counts of fraud in the inducement, fraud, civil conspiracy, piercing the corporate veil, participation theory, breach of contract and unjust enrichment/quantum meruit, the plaintiff is seeking damages, individually, jointly and severally, for an amount in excess of $2,000,000, plus additional compensatory damages, consequential damages and special damages, as well as punitive damages, attorney’s fees and costs and interest on all amounts and for such other and further relief as the Court deems just and proper, to the maximum extent allowed by applicable law.
The plaintiff is represented by Gary P. Lightman, Glenn A. Manochi and W. Lyle Stamps of Lightman & Manochi, in Blue Bell.
The defendants have not yet secured legal counsel.
U.S. District Court for the Eastern District of Pennsylvania case 2:22-cv-00688
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com