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As a result, the Division of Consumer Affairs will pay $2,900 in restitution to the victims from a court-ordered August auction of unclaimed dresses and other assets of Red Carpet Pageant and Prom.
What’s more, estranged co-owners Patricia and Michael Dowling must pay $110,000 in civil penalties, $26,000 for the state’s attorneys’ fees and investigative costs, and $18,000 to Greenbaum, Rowe, Smith & Davis LLP, the law firm that acted as the court-appointed receiver.
“This judgment brings victory to the consumers who were defrauded after they paid large, up-front deposits for dresses that were supposed to be ready in time for the prom, a major event in an adolescent’s life,” state Attorney General Jeffrey S. Chiesa said.
The State Division of Law, acting on behalf of the DCA, filed suit against Red Carpet and its owners in June 2012. The Route 23 business abruptly closed its doors the month before – smack dab in the heart of prom season.
At least 16 customers paid in full or part for dresses — totating $5,400 — in advance of their big nights were shocked and broken-hearted when they could neither get the merchandise nor obtain a refund.
As the complaints mounted, Wayne police charged Patricia Dowling with filing a false burglary report.
Meanwhile, Wayne police, state officials and others stepped in, finding dresses for those who were left stranded. Local stores offered free and discounted dresses, as well.
Under the court-ordered judgment, Patricia Dowling is permanently barred from managing or owning any business organization in the state – and both she and her husband can never again advertise or sell pageant dresses, prom dresses, or other formal wear.
“The State of New Jersey will not tolerate businesses that violate the law by making false promises to consumers, then failing to provide the goods and services consumers have paid for,” said Eric T. Kanefsky, acting director of the New Jersey Division of Consumer Affairs.
On June 6, the day after the state filed its lawsuit, the DCA obtained a court order allowing it to change the locks at the Red Carpet store, impound all merchandise and records and begin returning dresses to their rightful owners.
Seven people got dresses back as a result.
The state’s lawsuit officially accuses Red Carpet, Prom and Pageant Place, Patricia Dowling, and Michael Dowling of violating New Jersey’s Consumer Fraud Act by engaging in “unconscionable commercial practices, false promises, misrepresentation, and/or deception.”
In late August, the court-appointed auction of all unclaimed dresses and remaining merchandise produced $14,360, of which $5,411 was subtracted for expenses, the DCA said today. More than 1,000 gowns fetched from $5 to $50.
The remaining $8,949 has been held in the receiver’s trust account.
The way it breaks down: The DCA pays $2,924.99 to the 11 consumers who are still awaiting refunds. The remaining $6,024.01 will be paid to Greenbaum, Rowe, Smith & Davis for its services as the court-appointed receiver. The rest of the law firm’s $18,041.44 balance is to be paid by the defendants under the final judgment.
Investigator Donna Leslie of the DCA’s Office of Consumer Protection led the probe along with Investigators Oscar Mejia and Ediz Laypan. Deputy Attorney General Nicholas Kant is representing the state.
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