3rd Circuit Appeal Seeks to Hold Best Buy Liable for Fraud Scheme

The 3rd U.S. Circuit Appeals Court docketed the appeal Friday (docket 23-1098) by four plaintiff-appellants who seek to hold Best Buy accountable for the investments they were coaxed into making in a fraudulent delivery and installation business during the height of the COVID-19 pandemic. Rafi Gibly, Christian Vieri, Yosef Lipkin and Anthony Nougues Guitera seek to reverse a Dec. 15 U.S. District Court for New Jersey order granting Best Buy’s motion for dismissal of their fraud complaint, said their notice of appeal. The co-owners of the sham business, Yevgeny Shvartsshteyn and Arsen Lusher, both nonparties to the litigation, twice invited Gibly to meet them in March and December 2020 at a Best Buy distribution center in Piscataway, New Jersey, said the dismissal order accompanying the notice. During both tours, the three were greeted by two different managers or supervisors wearing Best Buy security badges, both with access to restricted areas of the facility, and with “extensive knowledge of the logistical operations at the site,” it said. The Best Buy employees vouched to Gibly for the fleet of trucks Shvartsshteyn and Lusher owned, promising an increase in demand for home deliveries due to the pandemic would mean an increase in delivery opportunities and a windfall for investors in the Shvartsshteyn-Lusher venture. “Due to the conduct of the Best Buy employees during the tours,” Gibly invested in the Shvartsshteyn-Lusher venture and convinced three others, ultimately his co-plaintiffs in the action, to invest, it said. Only after the plaintiffs learned the venture was a fraud did they realize that the Best Buy employees involved in the tours participated in the scam and knew their representations about the trucks were false, said the dismissal order. The plaintiffs sued Best Buy for aiding and abetting fraud. In granting Best Buy’s motion to dismiss, U.S. District Judge John Vazquez determined the plaintiffs “failed to sufficiently plead that Best Buy is liable for the alleged misrepresentations of its employees under the doctrine of apparent authority,” it said. Their theory of Best Buy’s liability “forecloses any reasonable inference that Best Buy knew of the underlying fraud,” it said.