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Consumers Get Payday in Supplier Scam

Wednesday, November 11, 2015

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An Arizona building materials supplier will pay thousands of dollars in restitution after 15 consumers complained that the company failed to deliver materials as promised.

A now-shuttered franchise of Rastra Holding LLC, based in Scottsdale, will pay $162,000 as part of an Assurance of Discontinuance with Arizona Attorney General Mark Brnovich.

builder
©iStock / ampak

Approximately 15 consumers filed complaints against the building materials supplier. They claimed the materials were never shipped.

Rastra markets and sells construction materials made from recycled foam plastics to customers throughout the U.S. Karl Holik, a managing member of Rastra Holding, negotiated and signed the document.

Authorities announced the agreement Monday (Nov. 9)

The Allegations

The Attorney General’s office said that between 2012 and 2015, the state received approximately 15 complaints against Rastra entities.

Consumers claimed they contracted with Rastra for the purchase and delivery of post-recycled plastic and concrete construction materials, but the materials were never shipped. 

Based on the allegations, Rastra marketed and processed orders it could not fulfill; continued to accept down-payments for products it knew would not ship; deceptively misrepresented fulfillment dates and fabricated excuses (such as sickness, weather problems and travel) for non-delivery; misappropriated consumer funds; and failed to make good on refund promises, the Attorney General’s office said.

Restitution and Fees

To resolve the case against Rastra, Holik and Rastra agreed to discontinue marketing and selling products they could not deliver, provide timely refunds and adhere to all requirements in the Arizona Consumer Fraud Act.

In addition to the $162,000 in customer restitution, Holik is further required to pay $9,500 in attorneys’ fees and investigative costs in monthly installments.

attorney
©iStock.com / jerry2313

Rastra's owner Karl Holik will also pay $9,500 in attorney's fees and investigative costs stemming from the case.

Neither Holik nor the company admitted or denied the state’s allegations, according to the agreement.

According to the company’s website, the plastic-and-concrete building blocks sold by Rastra were invented in Austria in 1972. 

Editor's Note: The story was updated at 10:56 a.m. Nov. 11 to clarify company ownership.

   

Tagged categories: Building Envelope; Building materials; Business matters; Concrete; Fraud; Laws and litigation; North America; Recycled building materials

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