ATLANTA — An Atlanta-based business accused of preying on Black community has a choice: Stop doing business or pay the state nearly $2.2 million. This follows a year long 11Alive News investigation.

According to Fulton County court records, the state entered into an Assurance of Voluntary Compliance agreement with Beauty Supply Institute and its founder Devin Robinson. It orders the company, along with another associated company under the name Derobis Enterprises, and Robinson individually to stop doing business in Georgia.

11Alive News Investigates has talked with more than a dozen people from across the country who say they paid Beauty Supply Institute thousands of dollars to consult, supply, stage and open their own store.

In return, many clients have reported bankruptcies, home foreclosures, and low credit scores due to mounting credit card debt – all in an effort to pay the lease while waiting for product shipments to arrive.

The new court order accuses BSI of violating the Business Opportunities Act in a way that is unfair or deceptive. It says BSI failed to provide mandatory refunds and disclosures, failed to maintain an active surety bond, collected greater payments than allowed in advance of services, and failed to establish or maintain independent escrow accounts.

While the agreement does not require BSI or Robinson to admit any wrongdoing, a spokesperson for the AG’s office says the agreements is a “hammer clause” meant to ensure compliance. If Robinson fails to comply with any part of the agreement, which bars him from advertising, offering, or selling any product or service in Georgia, he will have to pay financial penalty immediately.

The AG’s office says it reach the penalty amount of $2,189,255 by adding up claims filed as well as penalties for violating the Fair Businesses Practices Act. 

This means, unless Robinson violates the terms of the agreement, former clients will have to seek restitution through their own civil lawsuits. 

Shalanda Webb, who tried to open a store with BSI’s help in Arkansas did win a half a million dollar judgment from a Fulton County court in December of last year, but has yet to receive a dime. Many people struggling to recoup the money lost felt the state’s actions were their only hope for reimbursement.

Kenitha Ferguson is also waiting on a federal judge to rule in her case.

Ferguson said she paid BSI $75,000, partly to purchase products, but ended up renting an empty store for nearly a year. She eventually opened her store by borrowing money to purchase products directly from vendors.

BSI maintains it has done nothing wrong and filed a motion to have Ferguson’s lawsuit dismissed, stating in its legal response there is “contributory negligence” and that at all times BSI operated “without malice, oppression, or fraud.”

11Alive News did reach out to Robinson’s attorney as well on Tuesday, but have yet to receive a response. In the past, BSI has threatened legal action for defamation against some clients who have taken their stories to the media.

In prior written statements, Robinson has attributed delays to backorders, health problems, and rapid growth. The company claims 116 store owners across the country owe it more than $7 million.

BSI’s office in Mableton is closed and the company’s website has said for months that its phone lines are temporarily down due to a system upgrade. That has further fueled client frustration around communication.