In one of the largest consumer protection cases ever brought by the state, Virginia yesterday sued a health spa company for $2.27 million for deceptive practices, misrepresentation and unpaid membership refunds, according to the state attorney general's office.
The suit, filed yesterday in Prince William County Circuit Court, charges that the firm operating the Fitness Exercise & Aquatic Centers owes about $350,000 to some 1,600 prepaid members whose dues were not refunded when the spas went out of business seven months ago.
The state also is seeking $1.6 million in civil penalties from the operator of the spas for harassing members by continuing to seek installment payments, and for stating that local consumer offices had approved its collection efforts when in fact they had not.
In addition, the suit seeks $320,000 in legal and investigative costs.
Four of the spas were located in Northern Virginia, including two in Prince William County. Two others were in Prince George's County.
The spas closed their doors Jan. 31, provoking an outcry from people who had paid hundreds of dollars in membership dues.
The operator of the spas named in the lawsuit is an Ohio-based firm called Beachwood Spas International, several related companies and Arny Kleinman, president of Beachwood.
Neither Kleinman nor the firm's attorneys in Northern Virginia could be reached for comment yesterday.
The suit charges that Beachwood illegally sold contracts of more than three months' duration without the required notice of the buyer's right of cancellation and without having posted a bond or letter of credit.
According to a spokesman for the Virginia Attorney General's office, Kleinman had agreed that if the spas were to close, the firm would not owe more than $50,000 in unfulfilled membership contracts because that was the amount of the bond he had posted.
In Virginia, health clubs are required to post bonds or letters of credit or cash for up to $50,000 for each facility.