UPDATE: There is a settlement agreement with AAA of $1000.00 payment from AAA and to only provide new mattresses, follow the voucher authorizations, and mutual releases of liability between DSS and AAA. Based on that agreement, there was a discontinuance of the action. ~ Albany County
Albany County Executive Daniel P. McCoy today announced that the county has filed a series of lawsuits against Albany furniture stores for illegal business practices including selling mattresses infested with bedbugs to clients of the Department of Social Services. The lawsuit filed against Seraj Enterprises, DBA 99 Cents and More, of 141 S. Pearl St. and two other firms alleges that the company engaged in fraud for violating the terms of its contract with the county by illegally substituting household items included on vouchers provided by DSS.
The department provides vouchers to those clients who need household items. The vouchers can be redeemed at businesses that sign a contract with the county and agree to specific guidelines and prices for items provided to clients. In two cases, DSS clients have stated that their children were bitten by bed bugs from mattresses sold by 99 Cents and More and that the infestation forced two clients to vacate their apartments. The county hired a pest control firm which found the presence of bedbugs and evidence that the mattresses were unsanitary, defective and of poor quality.
“This egregious behavior will not be tolerated by my office,” said McCoy. “I was shocked to learn that a vendor would provide a mattress that was infested by bugs, of poor quality and unsanitary. It’s shameful really that they would have such disregard for families in need. The county will take all necessary remedies to make sure that these businesses are held responsible for such practices. We are also seeking to void their contracts with the county to serve DSS clients.”
County Executive McCoy also announced that the county has filed suit against two other vendors: AAA Furniture Outlet, 73 Central Ave. and City Discount Furniture, 278 Central Ave. alleging that the vendors violated their contracts by illegally swapping household items listed by DSS. The suit also claims that items paid for by the county were not delivered, were broken or dirty when delivered.
Since the county investigation began last year, there have been at least 10 instances of illegal swaps that took place. In several of those cases, the vendor substituted less expensive items and kept money it was not entitled to. The loss to the county is nearly $3,000. The county is seeking to recover those damages and an additional $25,000 in punitive damages from each vendor. In addition, the county is asking that the court order a pest inspection at 99 Cents and More in order to protect consumers.
The County Executive also announced a change in policy as a result of this case. Going forward, DSS vendors will only be able to provide clients with new mattresses. The county is asking clients to check the tags on their mattresses and to call their caseworkers if there are questions.
The specific allegations against Inayatullah Seraj and Seraj Enterprises, DBA 99 Cents and More, at 141 S. Pearl St:
The county alleges fraud, illegal substitution on DSS vouchers and providing mattresses with infestation of bedbugs and of poor quality. In October, the defendant allegedly sold a client a manufactured and refurbished mattress from The Mattress Cloud in Brooklyn, NY, a supplier of refurbished and remanufactured mattresses. Shortly after the client received the mattress, her children were bitten by bedbugs. The infestation was so severe in her apartment that the client had to vacate the premises and the landlord had to pay $1,134 to decontaminate the premises.
As part of the investigation, the county utilized the services of Northeast Pest Control to determine if 99 Cents and More sold the infested mattresses to the client. In December 2013 the county purchased several mattresses and box springs for testing for bed bugs. Using a bedbug detecting dog, no living bedbugs were found, but there was evidence of previous bedbug and cockroach infestation. The mattress inspected was unsanitized, improperly tagged and in poor condition. Last month the county made a second purchase from 99 Cents and More and the bedbug sniffing dog detected the presence of bedbugs in the mattress.
It also alleged the vendor illegally substituted items listed on the client’s voucher, which listed a request for two single beds, one living room set and one kitchen set. The vendor instead provided two twin mattresses, a broken futon and a rug. When asked about the switch, the vendor replied: “Here are your options,” with no further explanation.
99 Cents and More was overpaid $1,120 on five transactions which violated the vendor’s contract with the county by swapping household items not specified on vouchers provided by DSS. In three of the cases, items were not delivered at all or if they were, they were in poor condition and unsuitable for use.
Ahmad Ziauddin DBA City Discount Furniture, 278 Central Avenue
Investigators determined that City Discount Furniture and the other defendants routinely swapped lower price merchandise and kept the remaining funds at the county’s expense. Example: If a client was approved to “buy” two beds with the voucher at $120 each, but instead the vendor swapped one bed for a $20 lamp, the vendor would keep $100. The lawsuit contends that the illegal swap occurred in at least three transactions in 2013 and on one occasion the mattress provided also appeared to be used, was ripped and not encased in plastic.
AAA Furniture Outlet, Virginia Spadaro, 73 Central Ave
The allegations against AAA Furniture are similar to the other vendors. It is alleged that on at least three occasions the vendor illegally swapped items, delivered broken items or failed to deliver the items in the course of the investigation, thereby netting AAA Furniture $1,375 in payments the vendor was not entitled to.