Corporate executives of a successful Los Angeles light bulb company that misrepresented the life and power of its products for years to fraudulently entice sales are liable for cheating consumers out of more than $21 million in gross sales.
That's the ruling of U.S. District Court Judge James V. Selna, who considered the excuses of the owners of Walnut-based Lights of America, Inc. (LOA) for three years and sided with Federal Trade Commission officials, who filed a Sept. 2010 lawsuit alleging deceptive trade practices.
Usman Vakil and Farooq Vakil, owners of LOA--which also has a distribution facility in Philadelphia and a manufacturing shop in Shanghai, acknowledged problems but denied any purposeful wrongdoing, according to court records.
The businessmen, both trained in engineering, developed and sold at least 15 different light emitting diode (LED) lamps in competition with incandescent lamps at outlets like Walmart, Sam's Club, ACE Hardware, Costco, Amazon.com, The Home Depot and Kroger by falsifying the power of their LED lights.
Inside Orange County's Ronald Reagan Federal Courthouse, Selna wasn't impressed that lawyers for LOA owners tried to erase the cheating by claiming the company offered lifetime warranties and by supplying what the court considered misleading scientific data about the bulbs.
"The Court finds sufficient evidence of Usman and Farooq Vakils' knowledge of LOA's deceptive acts or, at least, reckless indifference to the truth or falsity of the representations," Selna ruled on Sept. 17. "Consequently, defendants' assertion of 'good faith' is an insufficient defense, and any evidence of such is immaterial."
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At one point, the company tried to correct misrepresentations by sticking new labels on already-produced product boxes that mislead customers.
According to the Lights of America's website, six brothers launched the business in 1978 in a Los Angeles garage. The site declares the company maintains "a commitment to customer service and support."