Complaint Review: Mega Tan & William L. Groh - Fountain Hills, Mesa Arizona

KPHO TV 5 reports on the 9 month investigation by badbusinessbureau.com on Mega Tan. Click on this link to hear the actual broadcast. KPHO TV 5 Report


Mega Tan equipment being repossessed for non payment. One investor was ripped of for over $300,000 and another investor was ripped off for $80,000 from the Groh's.

Letters to the badbusinessbureau.com from victimized consumers have sparked a 4 month investigation on Mega Tan.

Letters like the following sparked the investigation:

My sister and her friend signed up with this company Mega Tan at one of their 4 stores in the greater Phoenix area. Just 2 days later they closed the location.

My sister and her friend all together paid $1,450.00 for 1 year membership.

We later found out they have been in Bankruptcy and have not been paying their bills.

The attorney generals office has known about this and has done nothing. Can you please help us?

.....UPDATE 7-20-00 (after this article below)

badbusinessbureau.com has seen this as a pattern across the country with respect to the Attorney Generals offices nation wide that do nothing at all. As we see it, the Attorney Generals offices are either over worked, understaffed and seem to only be interested in high profile cases, ... probably a little of everything we mentioned.

While you read the investigation below, Mega Tan has probably signed up 1 or 2 more consumers, soon to be victims because the attorney generals office has ignored this fraud. This man has consistently been doing this from state to state milking the companies he owns or that he puts in his teenage children's names. Read the report below with undisputed evidence.

STOP YOUR (illegal) POST DATED PAYMENTS NOW !!!! This is one of the many volunteer picketers representing the thousands of consumers victimized by Bill Groh and his Mega Tanning Salons and Health Club enterprises. Picketers cannot understand why Mega Tan is still allowed to sign up customers. If the Grohs are involved with a new possible investor, .... history proves, "it's doomed to fail." The Grohs closed over 38 Health Club/Tanning Salons under their ownership or management, all went out of business years ago in Arizona and in Texas and now in Arizona again.

STOP GIVING POST DATED PAYMENTS: A common practice by the Mega Tan Stores. The Gorh's instruct employees to take post dated checks and credit card charges from the Mega Tan consumers, soon to be victims. Where is the money going to? The Groh's are not paying the payroll taxes deducted from their employees.

WARNING! URGENT!

MEGA TANNING CENTERS IN BANKRUPTCY. SIX TO SEVEN THOUSAND CURRENT AND FUTURE MEMBERS AT HIGH RISK OF LOSING THEIR MONEY OR ALREADY HAVE.

Mega Tanning Centers filed Chapter 11 Bankruptcy on December 2, 1999. William L. Groh, General Manager, has in the past 23 years owned or managed numerous businesses that have failed leaving approximately 50,000 members without their money. Personal and business IRS taxes estimated at one million dollars have not been paid, including employee payroll taxes.

William L. Groh is presently overseeing the operations including deposits of Mega Tanning Centers in the Phoenix Arizona area. Post dated checks and credit cards are being taken as part of the sales program. It is nearly impossible to track receivables and cash transactions. As of March 2000, employee payroll taxes and some equipment lease payments are not being kept current during bankruptcy. One location in Scottsdale, AZ was closed on December 16, 1999. There were approximately 2,500 members for that location alone that are now victims.

Deceptive sales practices are being used NOW. Long term memberships (one year and 52 session packages) are being sold NOW at $700 to $900.

1977 ATTORNEY GENERAL'S ORDER TO DISCONTINUE BUSINESS ACTIVITIES IN THE STATE OF ARIZONA

William L. Groh, self-proclaimed "Tan King" is the General Manager and the person behind the scenes of Mega Tanning Centers. Jennifer Groh, his daughter, was once named President for corporate purposes. William L. Groh has managed the company since June 1997. In an order and judgment by the Arizona Attorney General's Office dated December 29, 1977, William L. Groh, Spa World, and companies were permanently ordered out of business for violations for consumer fraud. Generally stated, he was not to conduct business permanently in the state of Arizona having to do with the spa membership and service business. See documents # 1, 4 pages

Failures of Spa World (William L. Groh) and 24-Hour Nautilus (Gordon Hall) were the two health club businesses that led to health club reform in Arizona. New laws passed in the 1980's put controls on long term membership sales. Untold thousands lost lifetime memberships.

William L. Groh is a master manipulator and an accomplished liar. In addition to his Spa World frauds, the following is his trail of cons.



WILLIAM L. GROH, self proclaimed "THE TAN KING" HISTORY

New Day Fitness Centers, Austin and San Antonio, TX. There were approximately eight health clubs managed by William L. Groh. They were closed in 1985 and left members with nothing and employee payroll taxes of approximately $100,000 not paid. See documents #2, 2 pages.

International Tan, Dallas and Metro area, TX. There were approximately sixteen tanning salons managed by and partially owned by William L. Groh. They closed in 1993 and again, the members and IRS were left with nothing. William L. Groh is now personally liable for the $186,000 employee payroll taxes not paid during his management and ownership of International Tan. See document #3, 3 pages.

Bill Groh Plead Guilty of Misapplication Fiduciary Property on May 3, 1996. William L. Groh was employed as General Manager of a tanning salon located in the north part of Houston, TX from December 1994 to May 1995. He was ordered to pay $60,000 restitution and placed on probation for five years. During his time as General Manager, approximately $70,000 in employee payroll taxes were not paid and not disclosed to the business owner. The owner is still paying these taxes. The terms of his probation included avoiding the use of alcohol and controlled substances. In August 1997, William L. Groh pleaded guilty to Arizona DUI charges, paid fines and ordered to attend classes, but there was no probation revocation. See document # 4, 3 pages.

Mega Tanning Centers, Mesa and Fountain Hills, AZ, 1997 to current. William L. Groh and his daughter, Jennifer Groh, as being held responsible for approximately $138,000 in unpaid employee payroll taxes accumulated from June 1997 to February 1999. IRS has released the only other stockholder of Mega Tanning Centers from personal liability. Also, under William L. Groh's management, Mega Tanning Centers owes approximately $23,000 to the Arizona Department of Revenue. Terms of his probation also stated he would commit no offense against the laws of Texas or any other state of the United States. See document # 5, 12 pages.

Also see AZ Dept. of Revenue document that shows $78,000 owed. Document # 6, 1 page.

ATTORNEY GENERAL WARNED THREE TIMES IN WRITING ABOUT MEGA TANNING CENTERS AND WILLIAM L. GROH ...PLUS NUMEROUS PHONE CALLS TO THE AG's OFFICE

Since November 1999 the Arizona Attorney General's Office has been warned three times in writing and many times by phone conversation about consumer fraud being committed by Mega Tanning Centers under William L. Groh's management and direction. There has been no follow up and one response was don't bother me" Approximately four to five thousand plus memberships have been sold since the Attorney General's Office was first notified. See document 7, A, B, C. & D.

AZ CORPORATION COMMISSION RECEIVES FRAUDULENT FILING FROM MEGA TANNING CENTERS AND JENNIFER GROH

A fraudulent filing was completed and submitted by Jennifer Groh to the Arizona Corporation Commission on March 31, 1999. First, William L. Groh was not disclosed as a felon and secondly, Jennifer was not the President of Mega Tanning Centers at that time. In a Superior Court agreement, Jennifer Groh resigned as President in February 12, 1999 and prior to the submittal of the Annual Report and Certificate of Disclosure to the Corporation Commission. See documents # 8, 3 pages.

HOME MORTGAGE FRAUD BY JENNIFER GROH

In 1998, Jennifer Groh purchased a home for over $305,000 in Fountains Hills, Arizona and financed the home through Norwest Mortgage. At the same time she owed approximately $25,000 to the IRS for tax period ending 12/31/97 and Mega Tanning Centers, for which she was the President at the time, had not paid payroll depositories since July 1997. See documents # 9, 2 pages.

MINORITY STOCKHOLDER CHEATED

Jennifer Groh is a 70% stockholder; the remaining 30% is owned by one individual. The August 31, 1999 balance sheet shows $51,646.32 in dividends were paid. The minority stockholder was not notified of the dividend pay out and received no monies. See document #10, 1 page.

INVESTORS CHEATED

Two parties invested approximately $300,000 into Mega Tanning Centers and were blocked from getting their debt on the Mega Tanning Centers financial statements since 1997. Financial statements were controlled by William L. Groh. When the business went into bankruptcy, Jennifer Groh finally acknowledged the debt. .. Canceled checks available.

$150,000 UNACCOUNTED FOR BY WILLIAM L. GROH AND JENNIFER GROH

Approximately $150,000 in cashier's checks over the past 2-1/2 years could not be traced by Mega Tanning Centers' accountant. William L. Groh and Jennifer Groh would not respond to requests for verification.

.................

The documents refereed to in this rip-off Report are available AGAIN to the Arizona Attorney Generals office.

Next week the badbusinessbureau.com will be picketing the Arizona Attorney Generals office to get them to handle this as a criminal matter and to put a stop to this consumer rip-off.

AGAIN, In an order and judgement by the Arizona Attorney General's Office dated December 29, 1977, William L. Groh, Spa World, and companies were permanently ordered out of business for violations for consumer fraud. Generally stated, he was not to conduct business permanently in the state of Arizona having to do with the spa membership and service business. See documents # 1, 4 pages

Other consumers wanting to see these documents? We will try to have them posted in the near future. You may request a faxed copy. All requests must be by e-mail to [email protected] Depending on the amount of pages you want will determine if there will be a cost involved.

OTHER DOCUMENTS AVAILABLE

Document # 11- Bankruptcy attorney for Mega Tan was warned previously numerous times about the Groh family mismanagement. After many pleas to the court, the Judge finally takes action to stop the Groh family mismanagement. "Fiduciary duty to Mega Tanning Centers may have been violated"

Document # 12- William L Groh receives D.U.I. in Arizona during his probation. This was in August of 1997. There was no probation revocation.

Document # 13- 3 documents 16 pages- Bankruptcy judge orders trustee for Mega Tanning Centers. "Groh family lining their own pockets at the expense of the creditors.

Other documents will be available like Balance sheets that will show the corporation is over 900,000 in debt. ................. UPDATE 6-14-00

On 6-12-00 badbusinessbureau.com investigators entered the Mega Tan stores to get price sheets. We were told that they are now offering 25 to 50% off on all memberships. (The Tanning centers are already way over booked according to investors who lost over $300,000)

bad business bureau also recorded phone conversations with all 3 stores to verify that the fraud still continues to unsuspecting hard working consumers.

**Fountain Hills, Mega Tan - William Groh's wife, Janelle Groh answered the phone and immediately tried to sell me a discounted membership package to join Mega Tan. We then asked her about rumors if they were in bankruptcy, she said, "No that is not true, actually, wer're in the process of opening new stores"

**Mesa, Mega Tan on southern and Gilbert Rd. - Noah answered the phone. Noah is a long time employee and persional friend of the Grohs also offered to sell us discounted membership packages to Mega Tan. We asked about roomers of bankruptcy, Noah stated that., "O yah, were not in bankruptcy now, we had filed for bankruptcy at one time so we could get new tanning beds, the tanning beds we had was a bad lease." He also add, "We're not in bankruptcy now." "We are opening several new stores." ... he was then continuing to push for us to buy a membership package.

**Mesa, Mega Tan at Southern & Extension - Billy Groh's son answered the phone. He is a college student at ASU. Billy Groh also tried to sell us a discounted package and was bragging they were opening new stores. When asked about roomers of being in bankruptcy, he stated, "that is not true."

ARIZONA ATTORNEY GENERALS OFFICE SHOULD REIMBURSE ALL THE VICTIMS FROM THE SCOTTSDALE MEGA TAN SALON THAT HAS ALREADY CLOSED WHERE THOUSANDS HAVE LOST THEIR MEMBERSHIP MONEY. Arizona Attorney generals office ignores ongoing fraudulent sales by this known rip-off con artist and his family.

This is clearly a scheme to defraud people, ..what is the chance Mega Tan will be able to honor these membership contracts? In our opinion the AZ attorney Generals office should actually be reimbursing all the victims that signed up for these memberships since their offices were first notified, because of their negligence. OK, we know the law protects you, on this by way of immunity, but the state has recklessly ignored the warnings and were supplied all the documents well in advance.

WAS THIS CASE NOT HIGH PROFILE ENOUGH for the AG's office?

Nation wide this seems to be a problem with Attorney Generals offices.

According to consumers all across the country who have filed reports on the ripoffREPORT.com tell us the AG's office never responds or the AG's office shrugs off their responsibility by stating to victims, "this is a civil matter " ...even in civil matters the AG's office has the authority to enjoin fraudulent sales practices.

It is well know by lawyers and consumers alike, the Attorney Generals offices normally handle cases when it becomes high profile.

STILL THE ATTORNEY GENERAL HAS TO HAVE SOME RESPONSIBILITY It is a fact that, over all, Nationwide, attorney generals offices are understaffed (probably under paid) and not able to properly protect the citizens of their state. All too many times the AG's office shrugs off their responsibility by stating to victims, "this is a civil matter " ...even in civil matters the AG's office has the authority to enjoin fraudulent sales practices. Most definitely when it involves more than 6,000 consumers and growing every day.

The way this consumer advocate sees it, .. The AG's office should take some of the millions of Tax payers dollars it saved in employee saleries, and reimburse all those victims because of the negligence of the state, when the state was duly notified so many times!

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UPDATE 7-20-00...Bankruptcy Trustee just filed a motion in Bankruptcy court. ...Public record shows there is a Motion to go from chapter 11 (reorganization) now going to Bankruptcy chapter 7, ...that means "out of business" doors to be closed. Leaving thousands with worthless memberships. Just like the thousands from the Scottsdale store.

Still a potential sale still exists?

Can a new investor accommodate the thousands of existing members? The Grohs involvement would likely mean the same fate of the last 38+ stores closed from Arizona to Texas, where Bill bilked those health clubs and spas broke.

We are trying to warn consumers today, not to purchase memberships. Bankruptcy court said to an Arizona Republic Reporter "not necessary to notify consumers when in Bankruptcy" ... what is this country coming to? STOP YOUR (illegal) POST DATED PAYMENTS NOW to Mega Tan!!!!!!!!!!

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