Sources confirmed with NBC 7 Investigates the California Department of Justice is investigating local jewelry business Romano’s Jewelers, although details about the focus of the case could not be released.
Romano’s Jewelers has locations in upscale malls in Carlsbad, Downtown San Diego and National City.
In November, NBC 7 Investigates first reported concerns by military members and their families that the business is taking advantage of service members.
As a result of the story, the U.S. Navy warned all its sailors in the San Diego region about the company.
In addition, a person only wanting to be identified as a former Romano’s employee sent NBC 7 Investigates a 2012 “Order of Emergency Off-limits by Armed Forces.” It reveals earlier concerns the military had about the company.
The letter is written by a U.S. Marine Corp Colonel to Romano’s Jewelers on El Camino Real in Carlsbad.
In the letter the Colonel said, "this letter is to inform you that your establishment has been declared off-limits to service members attached to Marine Corps Installations West – Marine Corps Base, Camp Pendleton…This action is being taken on emergency basis because employees of Romano’s Jewelers reportedly have a scheme that manipulates electronic pay allotments from service member patrons.”
NBC 7 Investigates reached out to Romano’s Jewelers with these concerns and received this response from the business’ attorney:
“Romano’s welcomes any investigation of its sales practices by the Department of Justice, or otherwise, and looks forward to fully cooperating in the investigation. Romano’s stands by and supports our service members…As for the letter, it was arose from a misunderstanding that was cleared up years ago and Romano’s continues to sell to all members of the armed services community.”
A Marine Corps spokesman said the issue was not cleared up, and the off-limits status on Romano’s Jewelers is still in effect.
“[The purpose of the letter] is to warn them not to go there, and that’s a big thing. It’s a warning sign,” said Ed Olander, a personal finance counselor at the Fleet & Family Support Center on Naval Base San Diego.
Olander explained an allotment is an automatic deduction from a military member’s paycheck.
“A lot of stores will try and get service members to sign up for these automatic payments knowing they will get their payments,” he said. “Unfortunately it’s been abused by less reputable businesses nationwide and in San Diego.”
The problem of allotment abuse by businesses is so significant nationwide, the Department of Defense has announced starting January 1, 2015, troops will no longer be able to use allotments to buy items on credit.
Olander said this is significant because financial mismanagement is the number one reason why military members lose security clearance. Without that clearance, more often than not that person is unable to do his/her job meaning tens of thousands and even millions of taxpayer dollars wasted on training.