ALLENTOWN, Pa. (CN) – In two federal lawsuits, an employment complaint and a consumer class action, a woman claims she was fired for complaining that her employer sold $3 Chinese beer steins for $70, falsely claiming they had been handcrafted in Germany.
Rebecca Stoneback filed a whistleblower complaint and a class action against Artsquest, which describes itself as a promoter of art events and art education in Pennsylvania’s Lehigh Valley.
Stoneback says she became aware that Artsquest “was fraudulently selling beer steins and stoneware mugs by claiming same were manufactured … in Germany, when in fact such steins and mugs were manufactured at a factory in China.”
She says she “refused to sell the mugs and steins until defendants properly identified their origin.”
Stoneback claims she was canned from her “instructor” position or from a position stocking and selling merchandise “because she opposed wrongdoing and because she refused to violate criminal and consumer protection laws.”
The steins at issue are called Muskifest steins and mugs, a reference to Artsquest’s decades-old, 10-day music festival in downtown Bethlehem, Pa., Stoneback says. The festival attracts more than 1 million visitors annually and “is considered to be the nation’s largest non-gated music festival,” Stoneback says in one complaint.
She says Artsquest calls the steins “limited edition” and “handcrafted in Germany.”
But she says she discovered that Artsquest bought the steins from China for $3 apiece, then sold them “for a near 2,500 percent price increase,” taking “a hefty profit of $67 per stein … for each stein fraudulently sold.”
“Prior to mid-March 2012, defendants purposefully prevented plaintiff (and presumably other employees) from seeing the shipping boxes in which the steins or mugs were shipped to defendants,” the complaint states. “Instead, when a new shipment arrived, the boxes were delivered to an off-site location, unpacked, and then placed in the backroom of the store. Plaintiff would then typically remove the steins … from the backroom and place them in the front of the store for sale.”
Stoneback’s class action alleges a conspiracy “to defraud … consumers into purchasing cheap Chinese made beer steins and mugs under the premise that such items were handcrafted in Germany.”
She says that scheme violated the RICO Act.
Stoneback is represented by Justin Swidler, with Swartz Swidler, of Cherry Hill, N.J.
Artsquest said it did not comment upon pending litigation.