AG’s Office wins $8.2M in penalties and consumer restitution in trial against repeat scammer

Michigan defendants mailed nearly 600,000 deceptive solicitations for workplace posters to Washington businesses

SEATTLE — A Michigan-based scammer that has been deceiving businesses for years was ordered to pay more than $8.2 million in penalties and consumer restitution following a lawsuit brought by the Washington State Attorney General’s Office.

Following trial against Labor Law Poster Service and two of its principals, King County Superior Court Judge Maureen McKee imposed a $7.4 million penalty and awarded $850,000 in consumer restitution, plus interest, to the Attorney General’s Office. The court also ordered the defendants to pay the state’s attorney fees.

For almost a decade, the company has illegally targeted tens of thousands of Washington small businesses by mass mailing deceptive solicitations. These mailings deceived business owners into purchasing workplace posters they were not obligated to buy. The letters mimicked legitimate government communications. Before trial, the court had already determined that each of the company’s nearly 600,000 solicitations were deceptive, and violated the Consumer Protection Act, and that co-owner Joseph Fata was personally liable for the unlawful conduct.

The trial before Judge McKee focused on three issues: the personal liability of co-owner Justin Fata, the defendants’ violations of a 2016 injunction prohibiting them from engaging in the same deceptive conduct, and the amount of penalties and consumer restitution defendants would have to pay.

Focusing primarily on the bad faith of these repeat offenders, Judge McKee imposed a $12 penalty for each of the nearly 600,000 mailers sent to Washington business owners—amounting to $7.1 million. The Court also awarded $850,000 in restitution for those small business owners who responded to the deceptive solicitations and purchased workplace posters—along with 12% in prejudgment interest. 

The court also found the defendants violated a 2016 court order prohibiting them from sending deceptive solicitations in two ways: First by engaging in the prohibited conduct, and second by failing to distribute the 2016 order to the company’s employees.

For years, the Fatas have treated adverse legal actions as the cost of doing business. This lawsuit represents the third time the state has taken enforcement action against the Fatas’ operations, first in 2008 and again in 2016. The 2016 action resulted in an order requiring defendants to pay $1.2 million in civil penalties, restitution, and attorneys’ fees.

Assistant Attorneys General Zorba Leslie, Kelsey Burazin and Michael Bradley, Paralegals Mary Barber, Ashley Totten, KC Winfield, Anne Wallig, and Vick Walker all handled the case for Washington.

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