YOUNGSTOWN, Ohio – A local investor in Zoetic Global is seeking more than $1.7 million from the company in a lawsuit filed in Mahoning County Common Pleas Court.
The suit, filed Friday by Scott Gorley of Canfield, names Zoetic; its CEO, Avery Hong; and Jerome Ringo, executive chairman, as defendants.
It accuses Hong and Ringo of engaging in “an ongoing pattern of fraudulent activity by selling member share investment” in Zoetic on the “false premise” that the company held patents for “certain processes and technologies that, when developed, manufactured and marketed, would yield high returns to investors.”
Based on the representations, Gorley made investments totaling $670,000 in Zoetic and loaned the company another $100,000. In addition, he accepted a paid position at Zoetic and is owed $567,500 in unpaid compensation. Also while employed, he covered expenses totaling $356,993 to equip and renovate the Youngstown plant, which opened last year, and guaranteed a company credit card for $43,629.57, according to the suit.
The suit claims that neither Hong and Ringo nor Zoetic owned the patents for the technologies for which they solicited investments and “fraudulently misrepresented” to Gorley that they did. In addition, they failed to disclose the contract between Zoetic and the actual patent holder and that Hong had been the subject of a lawsuit in California and had a nearly $3.3 million judgment against him.
The eight counts in the suit include breach of fiduciary duty, negligent misrepresentation, constrictive fraud, rescission, breach of contract and unjust enrichment, in addition to seeking remedies under the Ohio Securities Act and seeking a receiver for the company.
In addition to Gorley’s investment, compensation and funds he loaned the company, he is seeking $1 million in punitive damages.
The new lawsuit comes two days after JPS Ventures, which owned the Youngstown building Zoetic occupied for less than a year, sued the company, seeking $527,864 and citing breach of contract.
Less than a year after celebrating the opening of its East Federal Street plant last July, Zoetic abruptly closed and cleared out of the plant in April.