Scott Wise and his wife Sherry flew to Maui last fall to escape Colorado’s winter. The septuagenarian couple looked forward to spending some relaxing time with their kids and grandkids.
But a stroll down Front Street in Lahaina’s historic district soured the Wises’ vacation bliss when a pair of young shopkeepers confronted them on the sidewalk. The saleswomen beckoned the Wises inside their shop which features an expensive line of cosmetics.
Scott brushed them off. But Sherry, who goes by Sher, got lured in. The bait? A complimentary eye treatment that purported to reverse signs of aging.
“She said ‘I’ll go in and take a look and be right back out.’”
After about 90 minutes Sher reemerged from the shop, La Belle Ame, holding a package. Scott asked her what she had bought. She demurred, saying only “she had gotten something for herself.”
Later that evening at the couple’s rented condo at Sands of Kahana, Sher told Scott what had happened. Under extreme sales pressure, she had used the family credit card to purchase $4,531 worth of cosmetics.
“My wife kept saying that it was her granddaughter’s birthday, and she couldn’t stay long. But the salespeople in essence ignored that, insisting that my wife needed to take care of herself and her skin,” Wise said.
“They were browbeating her and refusing to let her go until she was finally so confused and frustrated that she was going to agree to anything just to get out of the store,” he said.
The couple returned to the shop the next day to try and get their money back. An employee gave them a number to call and request a refund. Wise called but nothing ever came of it.
Wise filed a police report. The officer he spoke with said he had heard similar stories from other tourists before, and usually the amount of money they were trying to recover was also in the $4,000 range. The officer took the information Wise offered but said there was virtually nothing he could do to try and recover their money.
Wise is now pinning his hopes on the state Office of Consumer Protection after hearing an investigator has been appointed and his case is under review. The head of that office confirmed, in general terms, that an investigation is underway regarding the practices of companies like La Belle Ame. But he would not say whether it’s specifically tied to Wise’s case.
The multi-billion-dollar industry has been the target of the FBI and U.S. prosecutors in the past. Based in Israel and operating around the world, it recruits newly released military draftees to use high-pressure sales tactics to sell expensive cosmetics to unassuming middle-aged American women, according to published reports and leaked cables from U.S. diplomats.
Speaking from Israel, one of the owners of La Belle Ame said browbeating customers and hawking cosmetics on the street are not allowed by his employees, and if he finds out they are doing this, they are subject to disciplinary action.
“We’re doing everything we can to make sure this is not happening,” said Victor Mazliah, a partner in Hawaii Beauty Group, a parent company of La Belle Ame and several other cosmetic businesses operating on Maui and Oahu.
‘What Is It With These People?’
La Belle Ame, located at 709A Front Street, is one of several high-end cosmetic businesses in Lahaina that have come and gone over the years, all of them using similarly aggressive — some have said predatory — tactics.
Their salespeople often hang out on the sidewalk, hawking free samples and luring pedestrians inside with promises of revolutionary skin care products that will transform appearances. They’ll sometimes apply cremes and lotions to people’s faces on the street or grab their arms and lead them into the store.
Earlier this week, cosmetic salespeople in oversized sunglasses and white attire stood in the doorways of several Front Street shops, scanning oncoming pedestrians. They seemed to be gauging which ones to target and appeared most interested in middle-aged female tourists and couples. When they spotted someone who might be a potential customer, they tried to engage them in conversation.
“Aloha, beautiful ladies! Where are you traveling from?”
“Aloha! Welcome to Maui, guys!”
Sometimes the salespeople would reach across the sidewalk to offer pedestrians free samples of lotion or apply creme directly to women’s eyelids.
Lahaina resident Sharon Funk, 72, has encountered them on many occasions. A 50-plus-year resident of Lahaina, Funk is retired after years of working in retail shops on Front Street.
“I’ve had customers say to me, ‘What is it with these people? They are so rude,’” Funk said. “It’s carnival barking. The aggressiveness is shocking.”
Funk herself has been accosted many times by the make-up crews. She avoids Front Street when the shops are open or takes alternative routes.
“It annoys me that I have to go down an alley,” Funk said.
Sne Patel, president of the LahainaTown Action Committee, said it’s a longstanding problem that’s been difficult to eradicate.
“I have emails and emails and emails from people complaining. It’s heartbreaking. You don’t expect it from a place on Front Street where you have mom-and-pop businesses that are trying to offer customers a Hawaiiana feel,” Patel said.
Three years ago, the LahainaTown Action Committee helped gather testimony from residents and merchants who had run-ins with the cosmetic businesses. The testimony was in support of a legislative resolution that West Maui Rep. Angus McKelvey sponsored, urging Maui County to ban predatory cosmetic businesses on the island.
The resolution passed but the problem persisted.
“It’s out of control. The county needs to step up and do their job and enforce the laws,” McKelvey said. “They have the power of zoning. If they really wanted to crack down on these guys they could just turn around and say, ‘You’re in violation of the zoning in a historic district and we’re going to shut you down.’”
Mazliah said he can’t speak for what other cosmetic businesses do but he does not allow his employees to go on the sidewalk and approach potential customers.
“If one of my managers sees anything like that, it should be addressed because we have a clear understanding with the county what is allowed and what is not allowed to do,” he said.
‘It’s All About The Money’
Landlords who rent to predatory businesses need to be held accountable too and be fined daily for their tenants’ illegal behavior, in McKelvey’s view.
Patel said landlords often make thousands of dollars over the regular rental prices when their tenants are the problem cosmetic businesses. The average monthly rent for a 1,000-square-foot shop is already $15,000 so if they are offered another $5,000 to $10,000 on top, it’s hard for commercial property owners to resist, he said.
“It’s all about the money. They pay an extraordinary amount of money,” said West Maui County Councilwoman Tamara Paltin.
Lahaina-based commercial real estate agent John Cote said he’s done leases for a few of the cosmetic companies in the past and came to regret it.
“They’re the scourge of Front Street,” said Cote. “They’re right up in your face.”
Cote said they tarnish Lahaina’s reputation and drive tourism business away because people start avoiding Front Street and tell others to do the same.
County law is clear: Merchants are not allowed to sell their products on the street, and the cosmetic shops routinely flout that, Paltin said. Solving the problem boils down to enforcement, in her view. But who’s going to do it?
“Our police force is severely understaffed,” Paltin said. “They are focusing on violent crime and drug trafficking, and other things. I don’t think they have an officer to stand on Front Street and watch this.”
It’s also not a criminal matter unless someone files harassment charges, said Alana Pico, Maui Police Department information and education specialist.
There’s been talk of hiring a historic district resource officer who might be able to take it on, she said.
If the county would agree to create a Business Improvement District along Front Street, that might help, Patel said. An improvement district would allow funds to be raised through assessments on businesses. That could pay for staff and security to enforce county ordinances, assist in maintaining parks and other public spaces, and help reduce vandalism, he said, similar to the Aloha Ambassador program in Waikiki.
Lacking Enforcement To Crack Down
A major problem with the current lack of enforcement is that the county only has one inspector for the whole west side of Maui and he’s busy with other matters, like issuing fines for the construction of illegal seawalls and monitoring large development projects.
That person is Conklin Kai Wright, county zoning inspector. In 2015, he tried to crack down on the businesses. He staked out shops, observed salespeople preying on pedestrians walking along Front Street, and photographed them over the course of multiple days. That resulted in violation notices against a parent company of several cosmetic stores operating in Lahaina.
The company, Keyoni Enterprises, fought back in court. Plaintiff attorneys argued that the county’s action violated the company’s free speech and due process rights and it asked for a restraining order, which the court denied.
The county and Keyoni ended up settling, with the company paying $1,000 and agreeing not to try to sell cosmetics to customers on public sidewalks.
“They seemed to back off for a bit and stayed inside and what have you. And then late last year we started getting complaints and phone calls again because apparently another storefront had opened doing the exact same thing, very near to a couple of the other ones and they were doing this super-aggressive, out-on-the-sidewalk thing,” Wright said.
Wright said the Office of Corporation Counsel advised him that he would need to take photographs and video every single day if the county were to pursue daily fines against the cosmetic businesses. With just one inspector for half the island, that didn’t seem to be a good use of time, he said.
Making Fines Sting
If the fines were structured so they covered two months at $1,000 a day, that would be $60,000 and “that might sting a bit,” he said. But the way it is now, county attorneys require documentation of illegal activity every day for each daily fine.
If it’s a staffing issue, the county could empower citizens to take photographs and video to document the aggressive, sidewalk sales, McKelvey said. He also thinks the fines should be tripled or quadrupled.
“We gave the county the power to enforce health and safety regs, the power of zoning to preserve the quality of our historic district and the power of business regulation. We need them to be a partner in government and to help us,” he said.
“I really think if it was a priority for the administration, they could put a lot of resources to bear. After intense, repeated enforcement I think these guys would look for other areas.”
A spokesman for Mayor Michael Victorino said the mayor is aware of this problem on Front Street and is “looking into options to ensure that visitors and residents on Front Street can enjoy their visit to Lahaina town.”
When a Civil Beat reporter visited the shops in late March to observe sales practices and attempted to ask questions, no employees agreed to be interviewed.
A woman who said she was a manager at one of the Front Street shops did contact a reporter by phone, but she wouldn’t give her name and had blocked her caller I.D. She said 90% of her customers are happy with the products they purchase and with the customer service they get.
“We’ve been here for 10 years. Obviously we’re doing something right,” she said, and hung up.
The Israeli Connection
McKelvey thinks the federal government has a role to play in ridding Front Street of menacing salespeople. At least some of those who sell cosmetics on Front Street are likely Israeli nationals in Hawaii on tourist visas, he said.
The salespeople who approached the Wises last October had Israeli accents. Wise said he’s familiar with the accent because up until recently he worked for an Israeli firm.
U.S. prosecutors have pursued Israeli nationals in recent years for bringing workers to the United States on tourist visas and having them work at mall kiosks and other locations selling cosmetics and skin care products, often marketed as containing Dead Sea minerals. The Dead Sea is a lake in Israel that is world-renowned for the healing properties of its salt.
In 2016, Israeli businessman Omer Gur was sentenced to 6.5 years in prison in Virginia for conspiracy to launder money and defraud the United States, visa fraud, harboring and transporting illegal aliens, and other federal charges. He was indicted after being under FBI surveillance, according to the Israeli newspaper Haaretz. The former Israeli Navy special forces member was convicted after bringing almost 150 workers into the U.S. illegally to sell cosmetics and not paying taxes or reporting income for them.
In addition to jail time, Gur was fined $25 million and made to forfeit vehicles, property and cash.
Many of the cosmetic workers have recently completed their mandatory service in the Israeli Defense Forces and are looking to make quick money, according to published reports and cables from U.S. diplomats published by Wikileaks.
“The financial incentive is great; post-IDF salaries are low and jobs are scarce – hence their ‘need’ to find a way to quickly finance their university education and/or onward travels. The fact that working and receiving a U.S. salary is illegal on B1/B2 really does not bother them. From their perspective, ‘not many Israelis are caught,’” one cable reads.
The Dead Sea cosmetics industry operates in more than 36 U.S. states, and in countries like Australia, New Zealand, the United Kingdom and Germany. Authorities have caught Israeli cosmetic workers returning to Israel with large sums of money, implying not only “illegal employment, but also money laundering, and this, potential organized crime connections,” another cable says.
“Due to the amount of money being laundered and transported, Tel Aviv has long suspected a link between the Dead Sea industry and OC,” it continues, using short hand for organized crime.
The State Department should be putting pressure on Israel to help solve the problem and U.S. Immigration and Customs Enforcement should be checking visas and passports to make sure the salespeople are in the country legally and allowed to work, said McKelvey.
Stephen Levins, executive director of the Hawaii Office of Consumer Protection, said his office finds the situation in Lahaina troubling and has some leverage to go after the cosmetic retailers if they are found to be breaking the law. If a business violates Hawaii’s unfair and deceptive trade practices rules, penalties ranging from $500 to $10,000 per violation can be applied, he said.
“We do have an ongoing investigation,” Levins said.
Civil Beat reporter Marina Starleaf Riker contributed to this story.
Civil Beat’s coverage of Maui County is supported in part by a grant from the Nuestro Futuro Foundation.
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