Office of the Attorney General News Release Archive
Thursday, October 11, 2001
ATTORNEY GENERAL AND COUNTY ATTORNEY ANNOUNCE LAWSUITS AGAINST FOUR HOUSTON COMPANIES
Businesses Accused of Scamming Consumers Affected by Tropical Storm Allison
AUSTIN - Texas Attorney General John Cornyn and Harris County Attorney Mike Stafford today announced lawsuits against four Houston companies for their alleged role in price gouging activities. The businesses - two of them carpet cleaners , one of them a tow truck operator, and the other an auto repair service - are accused of violating the Texas Deceptive Trade Practices Act (DTPA) in the aftermath of Tropical Storm Allison.
One of the lawsuits is against Kenneth and Maria Boersma, doing business as Clean Pro Systems, Kleenpro Systems Corp., Kleenpro Systems, Inc., and First Choice Restoration. The Boersmas allegedly sent invoices to insurance companies and consumers for services that were excessive in price or never performed. Seventeen customers were billed anywhere from $6,686 to $17,800. The Attorney General's Office has obtained a temporary restraining order against Kleenpro to freeze the company's assets.
A second lawsuit names Atef Mostafa, doing business as Rambo's Wrecker Service and Lone Star Wrecker Service. The defendant allegedly quoted one price for services, only to raise the price once the vehicles had been towed and were in his possession. A third suit names Mudae Corporation and Ran Saar for charging thousands for carpet cleaning removal services and, in some cases, for not performing the work. Mudae refused to cooperate with investigators. Larry Miller and Robert L. Priestley, doing business as Mobile Mechanic, are named in the fourth lawsuit; they are accused of failing to perform repairs for which consumers paid.
"It is absolutely sickening that these business operators purposely took advantage of consumers who were already reeling from the effects of a devastating storm," Attorney General Cornyn said. "We are going to punish these businesses for what they've done. There were plenty of warnings against price gouging, and these shameless people refused to listen." County Attorney Stafford concurred, adding, "We warned unscrupulous business operators at the time that we would come after them if they chose to take advantage of consumers during the disaster and its aftermath. And that is exactly what we're doing."
In times of disaster declarations, the DTPA allows the attorney general's office to take legal action against price-gouging violators. Shortly after Tropical Storm Allison hit, both President George W. Bush and Texas Gov. Rick Perry declared Southeast Texas a disaster area. Anyone convicted of price gouging faces civil penalties of from $10,000 to a maximum of $100,000 per violation.
"By breaking the law, these dishonest businessmen and women have set themselves up for a major hit to their wallets," Cornyn added. "County Attorney Stafford and I intend to make examples of them so that other companies will think very carefully before they pull a scam on unsuspecting Texans."
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