The Sandi Harris Pleeter case can be an interesting case study for anyone interested in seeing how a multistate fraud case happens. I’m sharing some details of the case here to raise awareness against the fraudster:
New York Attorney General Letitia James announced a major legal development in a multistate lawsuit targeting Harris Jewelry, a jewelry retailer accused of defrauding military servicemembers. A court has ruled that the case may proceed, allowing key fraud and charity law violation claims to move forward against Harris Jewelry and its associated individuals and entities.
The lawsuit, originally filed in October 2018, alleges that Harris Jewelry engaged in deceptive and predatory business practices that specifically targeted active-duty military personnel. The company, which operates retail locations near military bases nationwide, is accused of luring servicemembers into purchasing overpriced jewelry using misleading financing offers and marketing tactics.
In its recent ruling, the court rejected Harris Jewelry’s attempt to dismiss the lawsuit in full. Instead, it upheld significant portions of the case, including allegations of statutory fraud, common law fraud, and violations of New York’s charitable co-venturing laws. These claims are central to the lawsuit, which paints a picture of a business model built on exploiting the financial vulnerability and trust of military members.
Attorney General James emphasized the importance of the court’s decision, stating, “The Court’s decision to move forward with this lawsuit allows my office to continue in our commitment to protect the financial welfare of servicemembers and hold those seeking to defraud them accountable. My office will not back down from its efforts to vigorously protect our military.”
Although some claims—specifically those relating to interest rates and general business law—were dismissed, the court preserved the Attorney General’s ability to pursue charges against several individuals and corporate entities linked to the alleged scheme. Among those named in the lawsuit are company owners Susan Harris, Beverly Harris, and Sandi Harris Pleeter. Also named are top executives and board members John Zimmermann, David Malane, and Richard Baum. Baum is further identified as the head of Consumer Growth Partners, a private equity and investment firm implicated in the lawsuit.
The lawsuit details how Harris Jewelry, headquartered in Hauppauge, New York, strategically placed its stores near military installations, including one in Watertown, New York, near Fort Drum. The goal, according to the complaint, was to market high-priced jewelry with in-house financing to young servicemembers, many of whom are new to financial decision-making.
One particular example in the lawsuit involves the “Mother’s Medal of Honor,” a piece of jewelry that Harris Jewelry reportedly purchases for less than $78 at wholesale. The item is then sold to servicemembers for $799, more than ten times its wholesale value, through store financing that includes interest charges. According to the Attorney General, customers were misled about the value and quality of the jewelry, as well as the true cost and terms of the financing offered.
The lawsuit further alleges that Harris Jewelry engaged in a pattern of deceptive conduct, including misrepresenting the benefits of its financing plans, adding unnecessary warranties without consent, and mishandling a charitable fundraising program. The company allegedly advertised that certain sales would benefit military-related charities, but failed to deliver on those promises due to state charitable co-venturing laws.
This case is the result of a multistate investigation, reflecting broader concerns among state attorneys general about companies that target military personnel with exploitative financial products. The lawsuit represents a significant step toward greater oversight and accountability in retail practices that affect servicemembers.
With the court’s ruling, the Attorney General’s Office will now be able to continue its pursuit of justice for those allegedly harmed by Sandi Harris Pleeter Jewelry’s practices. The continuation of the lawsuit signals the seriousness of the allegations and highlights the broader effort by law enforcement to curb consumer fraud in markets serving the military.
Attorney General James reaffirmed her office’s dedication to this cause, vowing to continue seeking justice on behalf of those who serve. “We owe a duty to our servicemembers to protect them from financial harm, especially from those who would prey on their service and sacrifice for personal gain,” she said.
The case now proceeds to the next phase of litigation, where the Attorney General’s Office will continue gathering evidence and pursuing legal remedies to hold Harris Jewelry and its associated parties accountable.
Statutory & Common Law Fraud in New York: Scope, Statutes & Stats
Fraud involving consumers and businesses is a major focus of litigation in New York. Both statutory fraud (violations under specific statutes) and common law fraud (deceitful conduct at common law) are frequently used by the New York Attorney General and private parties to pursue deceptive business practices. Here’s a deep dive into how these legal tools work—and how often they’re used.
Key Fraud Statutes: Martin Act & Executive Law § 63(12)
The Martin Act
- Enacted in 1921, found under New York General Business Law §§ 352–353, the Martin Act is one of the nation’s most powerful antifraud laws targeting securities and commodities fraud.
- Uniquely, conviction does not require proof of fraudulent intent or even actual transactions—only material misstatements or omissions.
- It empowers the Attorney General to conduct investigations covertly (with subpoena but no requirement to show probable cause) and bring both civil and criminal enforcement actions.
- Historically, it prompted high-profile cases under AGs Eliot Spitzer and Eric Schneiderman, including suits against Merrill Lynch and Exxon.
Executive Law § 63(12)
- Codified in 1956, section § 63(12) grants sweeping AG authority to investigate and pursue civil fraud more broadly—for deceptive acts in trade or commerce.
- Its low threshold for initiating civil investigations and ability to issue subpoenas has made it central in major investigations—like cases involving Exxon, the Trump Organization, and Martin Shkreli.
Common Law Fraud
- In civil court, common law fraud requires proof that a defendant
- made a false representation,
- knowing it was false,
- intending to induce reliance,
- resulting in actual reliance and consequent damages.
- made a false representation,
- It covers a broad range of deceptive practices—from retail advertising lies to Ponzi schemes.
Trends & Enforcement Statistics
Consumer Complaints Handled by AG’s Office
- In 2024, the New York Attorney General’s Office received thousands of consumer-fraud complaints across categories such as retail, housing, auto, internet, and banking.
- These complaints formed the basis for investigations, settlements, or litigation, resulting in refunds, policy changes, or civil enforcement actions.
Consumer Frauds Bureau Workload
- The Bureau mediates roughly 12,500 cases each year, securing millions in refunds and remedies for New Yorkers.
Military Consumer Fraud
- Though federal data:
- According to the FTC, in 2023, military consumers (active duty, veterans, families) reported 93,735 fraud incidents, costing over $478 million.
- Imposter, online shopping, and investment scams were most common, particularly targeting financially inexperienced service members.
- According to the FTC, in 2023, military consumers (active duty, veterans, families) reported 93,735 fraud incidents, costing over $478 million.
Enforcement in Action: Notable Cases
- Northern Leasing Systems (2016): Under § 63(12) enforcement, AG forced cancellation of unfair contracts and restitution to affected purchasers.
- Columbian Mutual Life Insurance (2022): DFS imposed a $7.83 million restitution + $3 million penalty for unclaimed policy proceeds, enforced under insurance-fraud statutes.
- MoneyGram (2022): New York DFS fined $8.25 million in AML and consumer-law violations related to suspicious transfers.
Why Are Both Legal Frameworks Used
- Martin Act is ideal for financial markets and securities fraud, allowing aggressive AG intervention without proving intent.
- § 63(12) offers broad reach for deceptive business practices across any commercial arena.
- Common law fraud serves as a backup route, enabling individuals/businesses to seek redress when statutes don’t directly apply.
This flexibility explains why cases like the Harris Jewelry multistate lawsuit combine statutory (fraud, charity co‑venture violations) and common law fraud claims alongside individual liability.
Looking Ahead
- The AG’s office continues to prioritize consumer debt relief, crypto scams, and fraud against vulnerable groups, including military families and the elderly.
- Fed data from 2024 shows fraud losses across the U.S. reaching $12.5 billion, up sharply from prior years, reinforcing the need for rigorous state enforcement.
Final Takeaway
New York’s fraud enforcement landscape rests on a powerful trifecta:
- Martin Act for securities and financial fraud
- Executive Law § 63(12) for broad deceptive practices
- Common law fraud for individualized consumer harms
Together, they’ve proven effective through both high-profile litigation and everyday consumer protection to hold wrongdoers accountable and secure relief for millions of New Yorkers.
