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Cohoes textile manufacturer accused of defrauding customers

Friday, November 15, 2013
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— A Cohoes textile manufacturer is being accused by the state Attorney General’s Office of deceiving its customers by simply taking their money and not fulfilling orders, state officials said Friday.

Most of those customers, the Attorney General’s Office said, were nonprofits and religious organizations ordering dishcloths for fundraisers.

The accusations were made in a lawsuit filed recently in state Supreme Court in Albany County against Sangamon Mills and its owner, Michael Scott of Clifton Park.

The attorney general is accusing the company and Scott of taking payment for orders they knew they couldn’t fulfill because the factory was no longer in operation. The building has been shuttered since April for numerous building code violations, officials said.

“Sangamon Mills’ conduct is especially egregious not only because the business took advantage of its loyal customers, but also because those consumers were nonprofits and church groups that use the dishcloths to raise funds for charitable purposes,” Attorney General Eric T. Schneiderman said in a statement.

In all, more than 100 not-for-profits and religious organizations nationwide are believed to have been taken in by the scheme, officials said, paying for dishcloths that never came.

Since April, Sangamon Mills continued to accept orders and checks totalling more than $15,000, while never advising the clients that their orders could not be fulfilled, officials said.

Scott took over the business in 2011, after his grandmother’s death. Soon after, Sangamon Mills started failing to fulfill orders that were paid in full. When the customers then tried to contact the factory, the voice mailbox was often full.

The attorney general is alleging violations of both state and federal law. He is seeking a permanent injunction prohibiting the company from engaging in illegal and deceptive practices, and an order for restitution be paid to customers.

 
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