Valentus counterclaim alleges raiding, extortion & RICO violations
Yesterday we covered a lawsuit filed by Valentus’ former SlimRoast coffee supplier, alleging they were owed $3.18 million dollars.
In response to the lawsuit Valentus mostly denied the accusations. They also filed a counter-claim of their own, which alleges their former supplier Advanced Laboratories International
engaged in a deliberate and calculated campaign to misappropriate Valentus’ goodwill, raid its distributors, and destroy its business.
Valentus’ counter-claim has also dragged Vitae Global into the fray as a named counter-defendant.
Vitae Global is tied to Advanced Laboratories through owner Louis Volpe. Volpe is a co-founder of Vitae Global, who sell a coffee product (not unlike Valentus’ SlimRoast) supplied by Advanced Laboratories.
According to Valentus’ counterclaim, Advanced Laboratories began supplying them with SlimRoast around March, 2015.
Valentus allege the March, 2016 contract in question Advanced Laboratories’ lawsuit relies on, gave the company ‘until May 2017 to purchase the coffee‘.
The supply contract also stipulated
Advanced Labs was not authorized to manufacture any product in excess of, or in addition to, the product specifically ordered by Valentus.
Valentus claim this agreement was broken and accuse Advanced Laboratories of manufacturing and selling SlimRoast in addition to what Valentus ordered.
Advanced Labs and Louis Volpe have intentionally and secretly manufactured excess SlimROAST for the purpose of selling it at significantly reduced rates both abroad and in the United States to both the consuming public and Valentus’ independent representatives.
Upon information and belief, Advanced Labs and Louis Volpe have used the Italian dark roast coffee in manufacturing the unauthorized SlimROAST.
Valentus allege this was done to undercut their own sales of SlimRoast, diverting business away from the company.
This was done with the aid of former Valentus affiliates, who were part of Vitae Global’s launch earlier this year.
Advanced Labs and Louis Volpe have conspired with a number of former Valentus independent representatives to form and operate a competing
company, Vitae Global, and to market and sell a competing product referred to as “Lean Java Bean.”
Upon information and belief, these former Valentus representatives include, but are not limited to, Jane Gallenero Lee, Steven Michelluci, Angela Foreman, and another entity owned and controlled by Louis Volpe, Team Success, LLC.
Research reveals that in February, 2016, Louis Volpe was a Double Diamond ranked affiliate in Valentus through Team Success LLC.
Valentus claim Volpe and his Team Success conspirators raided Valentus to form their own company.
These parties have conspired to misappropriate Valentus’ business, reputation, and goodwill by
(i) soliciting and raiding Valentus’ network of independent representatives, and recruiting them to join their competing company;
(ii) making false and deceptive claims regarding Valentus and its business;
(iii) inducing Valentus’ representatives to breach their agreements with Valentus;
(iv) continuing to traffic in counterfeit and unauthorized SlimROAST® as a means to undermine Valentus’ business; and
(v) marketing Lean Java Bean solely based on the reputation and goodwill of Valentus and SlimROAST.
This began with the offloading of manufactured SlimRoast in late 2016, for less than half the retail price Valentus was selling it for.
Valentus claim what was being sold was unauthorized product.
Jane Lee is a friend and close business associate of Louis Volpe.
At least as of October 2016, Jane Lee began offering and selling unauthorized SlimROAST in bulk quantities at $28.00 per box (less than half of the Valentus retail price, and less than the price at which Valentus representatives could purchase the product themselves).
Upon information and belief, Advanced Labs and Mr. Volpe manufactured and distributed the unauthorized product to Ms. Lee.
Ms. Lee continued trafficking in large quantities of unauthorized SlimROAST manufactured by Advanced Labs and Louis Volpe.
Steven Michelucci, another associate of Mr. Volpe, has also distributed and sold large quantities of unauthorized SlimROAST in furtherance of the conspiracy.
In or about December 2016 and January 2017, Mr. Michelucci posted on social media that he was selling “large quantities” of SlimROAST, and that he was offering the product at less than ½ the retail price and “much lower than wholesale including shipping!”
In March 2017, Mr. Michelucci confirmed that he has obtained hundreds of boxes of SlimROAST, and is continuing to distribute and sell the product at discounted rates.
Upon information and belief, the Counterclaim Defendants are also trafficking in unauthorized SlimROAST through Team Success.
Whether Advanced Laboratories manufactured excess SlimRoast with Valentus’ unfulfilled order is unclear.
The Counterdefendants have unlawfully sold, or caused to be sold, large quantities of unauthorized and counterfeit SlimROAST to Valentus’ independent representatives and the consuming public.
Valentus allege the affirmative while Advanced Laboratories deny the allegations in full.
In addition to offloading unauthorized SlimRoast, Valentus infer discrediting the company was part of Vitae Global’s launch.
In or about December 2016, Vitae Global and Mr. Volpe held a group sales call to promote Lean Java Bean for the purpose of raiding and cross-recruiting Valentus’ representatives.
Mr. Volpe directly participated in the call.
During the call, Vitae Global also engaged in false and deceptive practices by conveying that Valentus would be going out of business and would be unable to continue paying its representatives.
Vitae Global filed its own answer to the counterclaim on April 21st and also deny Valentus’ allegations.
With respect to the alleged breach of contract, Advanced Laboratories maintain that outstanding payment for the first lot of SlimRoast boxes would be made upon delivery of the second lot of boxes.
Valentus claim Volpe began demanding payment before that took place.
On November 12, 2016, Louis Volpe started sending threatening and extortionate text messages to Mr. Jordan.
Without having any basis to do so, Mr. Volpe demanded that Mr. Jordan immediately purchase a remaining container of Italian dark roast coffee for $356,000, citing the March 2016 agreement.
Mr. Volpe contended that he had surreptitiously recorded telephone conversations with Mr. Jordan, and would release the recordings unless Mr. Jordan immediately made payment.
Mr. Volpe represented that he had recorded one such conversation the prior evening.
Mr. Volpe stated that if Mr. Jordan did not wire the money, he would post the conversations on social media, including “a taped conversation everyone gets to listen too.”
Mr. Volpe claimed there would be hundreds of people on social media talking about the recordings, stating “All on social media,” “You [******] up big time,” and “get the wire made I will go away.”
Mr. Volpe further stated, “I am going to my office now to send you an invoice and if that transfer is not here by Tuesday morning for approx. $356,000 with shipping. Then I am doing what I said I was going to do.”
In contrast to Advanced Laboratories claims, Valentus claim they tried to purchase ‘the remaining Italian dry roast coffee (but) … they refused to sell the coffee‘.
Valentus allege this was because Advanced Laboratories was busy using the coffee to manufacture Vitae Global’s Lean Java Bean product and unauthorized SlimRoast.
Advanced Labs and Volpe then filed the instant suit in bad faith, falsely claiming Valentus breached the March 2016 agreement.
Valentus’ counterclaim accuses Advanced Laboratories, Vitae Global and Louis Volpe of
- attempted extortion (Volpe)
- illegal wiretap or recording (Volpe)
- trademark infringement (all counterdefendants)
- false association/unfair competition (all counterdefendants)
- RICO violations (all counterdefendants)
- trademark counterfeiting (all counterdefendants)
- unfair competition (all counterdefendants)
- intentional interference with contractual relations (all counterdefendants) and
- breach of contract (Advanced Laboratories)
Looking at the original complaint and counterclaim, it seems to me a strong focal point is whether Advanced Laboratories was manufacturing SlimRoast without permission.
If so, then whether that was what former Valentus affiliates (who are now Vitae Global affiliates) and Team Success (which for all intents and purposes is Louis Volpe) were offloading.
Advanced Laboratories claim Valentus informed them they would not be purchasing the outstanding coffee in December, 2016.
Valentus’ claims of counterfeit SlimRoast being manufactures predate this. And if they can prove Vitae Global’s Lean Java Bean went into production using the Valentus coffee, prior to the exact date they informed Advanced Laboratories they wouldn’t be purchasing, that’s a big chunk of the case in their favor.
Either way I can’t see Vitae Global pulling out of this. Volpe seems to have created Vitae Global to compete directly against Valentus with a near-identical product.
There appears to be plenty of recorded evidence of raiding taking place, so I can’t see that side of the counterclaim going in Advanced Laboratories’ way.
Then there’s the RICO stuff, which introduces a criminal element to the case.
As of today’s publishing date, the last entry on the case docket is Vitae Global’s April 21st counterclaim response.
Update 16th May 2017 – As per a May 3rd order, a tentative trial date has been scheduled for December 3rd, 2018.
Update 28th February 2018 – On February 21st Advanced Laboratories and Valentus informed the court they’d reached a confidential settlement.
Consequently Advanced Laboratories lawsuit and Valentus’ counter-claims were dismissed with prejudice.