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If you have ever walked into a mall, you may have had this experience - a young, attractive person walking up and trying to hand you a free sample. Today's story starts with that harmless gesture. But for some people, what followed cost them thousands. Monika Evstatieva and Caley Fox Shannon of NPR Investigations spent the past year talking to these customers, visiting stores and digging through consumer complaints. Here is what they found.
MONIKA EVSTATIEVA, BYLINE: Suzann Roberts was walking out of the Apple store at a mall in Ann Arbor, Michigan, when a guy approached her and handed her a sample of face cream.
SUZANN ROBERTS: He just put it in my hand. And he was so charming. And I ended up walking in there. And the whole time, I'm thinking, what are you doing?
EVSTATIEVA: The salesman also showed her an eye cream that she liked.
ROBERTS: So I said, I'll buy it. Well, then there was two tubes involved.
EVSTATIEVA: Her total, $475. And then he told her the creams work best with an LED light therapy wand. Her new total, $5,000.
ROBERTS: And I said, wow, no. I kept thinking, you're going to bring this back, I just want to get out of here, I'm going to bring it back.
CALEY FOX SHANNON, BYLINE: Mary Lee was visiting Santa Fe, New Mexico, when a salesman on the sidewalk offered her a sample. Before she knew it, she was in the backroom of a beauty store.
MARY LEE: And there was, like, four people around me. And they were just oohing and aahing, and soft music and soft light and all this stuff. And they said, well, see this amazing treatment?
SHANNON: Mary said it felt like an out-of-body experience watching herself spend $19,000. She figured she'd return it all the next day, until she discovered...
LEE: The receipt. And in a big red stamp, no exchanges, no returns, final sale. I just about lost my cookies.
EVSTATIEVA: Over the past year, NPR found hundreds of shoppers across the country who said they were pressured into buying expensive skincare products and services they did not want, could not afford or tried to refuse. The products had no price tags. There were no refunds and no returns.
SHANNON: The skincare brands had many names. Voupre, Orogold, Avinichi, Introstem, CBGardN. And so do the stores, Beauty Essentials, Beauty Revive, Mia's. But what happened in those stores sounded too similar to be a coincidence. And it turns out they do have one thing in common. They're licensed to sell products distributed by the same company, Mazal Group.
EVSTATIEVA: The California-based company is a family business. The owner is Daphna Oded Weingarten. And she operates the group alongside her husband, brother and his ex-wife. Through various companies, the Weingartens and Odeds own dozens of beauty brands. And they centralize their operations through Mazal Group.
SHANNON: Former employees of Mazal Group told us the family is from Israel, as are most of the store owners. We visited several stores where the staff identified themselves as Israeli. And customers confirmed the same. This matters because over a decade ago, the federal government was looking into Israeli-owned skincare stores.
MATT GRIMM: We were investigating Israeli-owned businesses that were associated with retail establishments selling cosmetic items in malls in various cities.
EVSTATIEVA: Special Agent Matt Grimm ran a task force of federal agents from multiple agencies to covertly surveil stores leased to an Israeli national. The investigation wasn't focused on predatory sales tactics. It involved violations of federal immigration and labor laws.
GRIMM: In one part, there was a visa fraud investigation. But then we figured out that there were people being employed illegally who had no workplace protections.
EVSTATIEVA: The store's manager owned kiosks selling two brands started by the Weingarten and Oded family. After months of surveillance, Grimm's team raided the stores and arrested a dozen young Israeli workers. The workers told him everything was arranged for them.
GRIMM: A lot of people told us, I came to the United States six or eight months ago. I've been housed in this apartment or the other apartment. They drive me back and forth to the malls every day.
SHANNON: Employees said they were typically recruited with the promise they could make big bucks selling skincare. They were also coached to lie to authorities. These salespeople were deported back home. The stores closed. And the local storeowner was sentenced to two years in prison. This was 10 years ago. But we found evidence that visa fraud is still happening in stores today.
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UNIDENTIFIED PERSON #1: (Through interpreter) First of all, it's illegal. You can't work on a tourist visa, so keep that in mind because they can deport you or throw you in jail.
SHANNON: This young Israeli man worked for three months last year in a U.S. store selling Introstem, another brand distributed by Mazal Group. When he returned to Israel, he posted a video online about the experience. NPR is not using his name because it would expose him to federal officials for immigration crimes.
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UNIDENTIFIED PERSON #1: (Through interpreter) Immigration authorities aren't looking for us. They're looking for the Mexicans who sell drugs, less for the Israelis who contribute to their economy.
EVSTATIEVA: There is a shorthand in Israel for this kind of work in American stores. They call them agalot - or, roughly translated from Hebrew, shopping carts. Today, recruiters use Instagram or Facebook promising the opportunity to make a lot of money and live in American cities. The former salesman explained how he rationalized manipulating customers.
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UNIDENTIFIED PERSON #1: (Through interpreter) Like, someone buys a cream from Chanel that doesn't work anyway. At least with our stuff, they get results. So who cares? They get ripped off everywhere anyway.
SHANNON: But do these creams actually deliver results? We sent an unopened bottle of anti-wrinkle cream from one of these brands to a cosmetic testing lab. The lab could only detect one of three wrinkle-fighting ingredients, an inexpensive peptide. We obtained internal order forms that show stores buy this product for about $20. They sell it to customers for 1,300.
EVSTATIEVA: Whatever the product is worth, the price in the store is what the employees say it is. And they need to get as much as they can because they only get paid on commission. The young man from the video said he made 30% on each sale.
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UNIDENTIFIED PERSON #1: (Through interpreter) But that doesn't make it OK, you know? It doesn't change the fact that what we do is basically a scam.
EVSTATIEVA: Mazal Group claims it isn't responsible for the actions of the stores because they're independently owned and operated. But this past summer, in addition to two storeowners, Mazal Group, the Odeds and Weingartens were defendants in a class action lawsuit brought by consumers in Hawaii. They settled for $650,000 and avoided their day in court.
SHANNON: We still needed to ask whether Mazal Group and the family behind it is aware of what's happening at the store level. For months, they ignored our attempts to reach them. So we flew to California to request an interview with Mazal Group's owner.
EVSTATIEVA: We are from NPR in Washington. And we just wanted to see if Ms. Weingarten is here today so we can talk to her because they are the owners of the...
UNIDENTIFIED PERSON #2: Am I being recorded?
EVSTATIEVA: Yeah.
UNIDENTIFIED PERSON #2: OK. Delete that. And we're not interviewing. If you need anything, you can contact our legal department.
SHANNON: We even tried Daphna Weingarten at her home. No luck. Then we sent a letter with questions about what we'd learned. Their lawyer said our reporting is inaccurate but wouldn't say how.
EVSTATIEVA: Then in September, Mazal Group terminated its business license. Former employees told us the family has shuttered companies in the past when a brand's reputation took a hit from online complaints or media attention. Now they've closed Mazal Group. Today, Daphna Weingarten and her husband have a new beauty company, INV, or Innovation Brands.
GRIMM: The show goes on, so to speak.
SHANNON: Grimm again, the Department of Labor agent. He said the industry he investigated 10 years ago is a resilient one.
GRIMM: There's too much money at play. You know, wherever there are proceeds to be had and easily made, they're going to keep doing it.
SHANNON: Caley Fox Shannon.
EVSTATIEVA: Monika Evstatieva, NPR News.
(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.
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