An electronics retailer abruptly closed its Salmon Run Mall location Friday after the state attorney general's office notified it that it was under investigation for allegedly fraudulent and deceptive business practices.
SmartBuy and several of its affiliates allegedly targeted soldiers and their families while engaging in deceptive lending practices, according to a release from Andrew M. Cuomo's office.
"The specific intent of this business was to target soldiers on the move, fleecing them for thousands of dollars and leaving them with little recourse," Mr. Cuomo said in a statement. "We have no tolerance for companies or individuals who take advantage of those serving in our military."
Mr. Cuomo claims that an investigation into SmartBuy revealed that soldiers were offered financing with monthly payments for consumer electronics, but actually were committing to open-ended loan agreements that cost the soldiers thousands of extra dollars.
Mr. Cuomo sent a letter to the company and its affiliates March 30 notifying it of his intention to bring legal action against it for the alleged activities. The attorney general claims that once the business became aware of the investigation, it shut down its kiosk and storefront in the Watertown mall, its only location in the state.
Named in the proposed litigation is Frisco Marketing of N.Y. LLC, Fayetteville, N.C., which does business as SmartBuy and SmartBuy Computers and Electronics. No representatives of either entity could be reached for comment Wednesday.
According to the attorney general's investigation, all SmartBuy locations are set up near large military bases. In 2008, its collective locations generated between $32 million and $36 million in revenue.
In addition to Frisco Marketing, the attorney general has issued a notice of proposed litigation to Integrity Financial of North Carolina Inc., Britlee Inc., GJS Management Inc., Rome Finance Co. Inc. and Rome Finance Co. LLC, as well as five individuals who are alleged to own or operate the entities.
Consumers who did business with SmartBuy or any of its affiliated businesses are urged to call the attorney general's regional office in Watertown at 785-2444.