90 Day Fiancé star Nicole Nafziger is an employee of clothing company LuLaRoe, which RadarOnline.com broke was sued for charging unlawful sales tax to customers. Now, Radar can exclusively reveal the business was hit with TWO more lawsuits.
In court papers obtained from the Southern District of New York, Lauren Porsch, individually and on behalf of others, filed a complaint against LuLaRoe, which is a multi level-marketing company that sells clothes through fashion retailers.
“Defendants unlawfully charged a ‘sales tax’ to customers in tax-free jurisdictions in New York on their purchases of clothing,” the complaint filed on October 11, 2018 read. “LuLaRoe knew its collection of taxes in these jurisdictions was unlawful, but concealed this fact from consumers, actively misleading them regarding the legality of its practice.”
The plaintiff called LuLaRoe’s practice ‘unlawful, unjust, deceptive and fraudulent.”
Beginning in 2014, a system called “Audrey” was implemented. The system included a toggle-switch that allowed LuLaRoe retailers to turn off tax charges when they made a sale in a tax-free jurisdiction.
LuLaRoe was paying sales tax on all sales regardless of whether or not the consumer was charged or paid sales tax on the transactions.
“Thereafter, LuLaRoe altered, or directed the altercation of, the Audrey POS to prevent retailers from turning off the sales tax feature when making sales delivered into other states with no sales tax, such as to class members’ jurisdictions,” the court papers claimed. “LuLaRoe retailers were instructed not to change the sales tax rate calculated by Audrey, even for remote sales delivered to jurisdictions where the purchases were not taxable.”
The court papers continued, “LuLaRoe knew that its sales tax policy was overcharging people in states that did not have a sales tax on the clothing that LuLaRoe sells.”
The company allegedly did not discontinue its sales tax policy.
Plaintiff Porsch was charged a “sales tax” on at least “13 remote purchases she made, totaling $50.63 or 7 percent more than the law allowed LuLaRoe to collect.”
The business charged a fraudulent tax on at least $104,144 sales transactions from April 2016 to June 1, 2017, the complaint claimed.
Although LuLaRoe said that they refunded the $329,922.83 it overcharged to the Plaintiff and the putative class, the Plaintiff believed the company “suffered absolutely no consequence for its knowing and unlawful conduct towards the class.”
The Plaintiff and punitive class is asking for actual, statutory and punitive damages. LuLaRoe has yet to respond to the filing.
On September 13, 2018, Melissa Hill, individually and on behalf of all others, filed a similar class action complaint against LuLaRoe for “unlawfully charging a ‘sales tax’ to customers in Montana, which imposes no sales tax on purchases.”
The Plaintiffs also called the company’s practices “unlawful, unjust, deceptive and fraudulent.”
The complaint also mentioned the “Audrey” system.
“LuLaRoe charged a fraudulent tax on at least 52,379 sales transactions shipped into Montana from April 2016 through at least June 1, 2017,” the court papers read. “Defendants conduct was intentional, wrongful, reckless and outrageous.”
The Plaintiffs are asking actual, statutory and punitive damages. LuLaRoe has yet to respond to the filing.
Earlier this month, Radar reported Katie Van, on behalf of others, sued the company for allegedly charging unlawful sales tax to customers in Alaska.
“From at least April 2016 through June 1, 2017, Defendants unlawfully charged a ‘sales tax’ to consumers in tax-free jurisdictions in Alaska on their purchases of clothing,” the amended complaint filed on September 13, 2018 read. “LuLaRoe knew its collection of taxes in these jurisdictions was unlawful, but concealed this fact from consumers, actively misleading them regarding the legality of its practice. This unlawful practice harmed Plaintiff and each class member in precisely the same manner.”
The filing claimed the business charged a fraudulent tax on at least 72,503 sales transactions shipped into non-taxing jurisdictions in Alaska from April 2016 through June 1, 2017.
LuLaRoe asked for a motion for extension of time to respond to the complaint. The company has until October 26, 2018 to file paperwork.
In October 2017, LuLaRoe was slapped with a lawsuit accusing the company of being an illegal pyramid scheme and violating a federal racketeering law used to target members of organized crime. The case was dismissed.
Nafziger recently joined the company and has been promoting the business on her Instagram page.
The business comes after Nafziger gave her fiancé Azan Tefou $6,000 to start a beauty business on 90 Day Fiancé: Will Nicole & Azan Say I Do?. Nafziger’s mother called the business a “get-rich-quick scheme,” as Tefou called off the wedding, used the money for the business and only contributed $500.
Sister Wives star Meri Brown is also an employee of the company, as she often promotes the business on social media.
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