After a 4 day trial and four and ½ hours of deliberation, a jury in Philadelphia June 28, 2017, found in favor of T.Levy Associates, Inc., and held that defendants violated the civil RICO act, embezzled funds, diverted sales from the company’s customers and breached their fiduciary duties to the company. Attorneys Daniel Dugan and Bruce Bellingham of Spector Gadon & Rosen represented the company. The court entered judgment against the defendants the next day for a total of $2.13 million. Michael R. Kaplan was the longtime Executive Vice President of the company, a beauty products corporation based in Philadelphia. After building the business from scratch, Ted Levy entrusted complete management of the entity to Kaplan, his son-in-law, upon his retirement. In 2016, due to his suspicions about poor results by the business under Kaplan’s control and observation of various suspicious problems, Levy terminated Kaplan and hired a forensic accountant to review the company’s books and records. The investigation uncovered the financial wrongdoings that formed the basis for the suit, which the firm filed in September 2016. The trial focused on claims that Kaplan and Kaplan’s wife, Nina, embezzled from and defrauded T.Levy in an attempt to support Nina’s competing businesses, which lost almost $1 million over the last 8 years, and to help fund her gambling habits. The company sued the Kaplans and Nina Kaplan’s business, BLC Beauty, Inc., alleging a pattern of RICO activities, tortious interference with a business contracts, conversion, and racketeering. The company specifically alleged that the defendants used a company-issued credit card to make unauthorized purchases of personal items and inventory for BLC Beauty, failed to pay rent for T.Levy Associates’ main office/warehouse, diverted business from TLA to BLC and used company funds to repay Nina Kaplan’s personal gambling debts as well as BLC’s business-related debts. The company’s forensic accountant testified to damages in excess of $1.6 million.
The case is T.Levy Associates, Inc. v. Michael Kaplan, Nina Kaplan, BLC Beauty, Inc., No. 16-4929 (U.S. District Court, Eastern District of Pennsylvania, Philadelphia). The judge was the Honorable Mark A. Kearney.