CEO of Culinary School PlantLab Charged With Embezzling $2.4 Million
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Editor’s note: This story was originally published on Sept. 5 at 1:30 p.m. and was updated Sept. 6 at 12:32 p.m. Click here for Entrepreneur's full coverage of PlantLab.
Adam Zucker, CEO of PlantLab, a plant-based culinary school formerly owned by celebrity chef Matthew Kenney, faces 35 felony charges after his Aug. 21 arrest.
The felonies, outlined in a complaint for an arrest warrant filed by the Superior Court of the State of California, were all allegedly committed by Zucker while he was at a previous job: executive vice president of licensing at Artissimo Designs, a ready-to-hang wall art company. Between January 2011 and July 2015, Zucker allegedly embezzled about $2.4 million, and between April 2012 and July 2015, he allegedly laundered close to $1.9 million. He also allegedly filed false personal income tax returns for the years 2012, 2013, 2014 and 2015.
"When Artissimo discovered Mr. Zucker's wrongdoing, Artissimo reported the matter to the police," said Roger G. Jones, an attorney representing the company.
The complaint is dated June 13, 2018 -- more than two months before Zucker’s arrest -- and signed by both the district attorney and the investigator, Brandon Browning. The court recommended Zucker’s bail be set at $790,000.
Meanwhile, the California Department of Consumer Affairs in July opened an investigation into Zucker's company, PlantLab.
“Following a consumer complaint, the Bureau became aware that PlantLab was operating an unapproved education institution,” said Matt Woodcheke, public information officer at the California Department of Consumer Affairs.
Woodcheke recommended PlantLab students reach out to the Bureau’s Office of Student Assistance and Relief to see what options are available to them online or by calling toll-free (888) 370-7589. Those affected students are significant in number: One Facebook group, PlantLab Scam, has 230 members and counting.
On Aug. 29, PlantLab emailed customers to say CEO Adam Zucker -- a former colleague of Kenney and the sole owner of the company -- had been unreachable since Aug. 21, the same day he was arrested. “All courses at all locations are canceled until further notice,” the company stated, calling Zucker “the only person solely responsible for all finances and location payments.”
Zucker forwarded an email to Entrepreneur that he said he sent to employees on Wednesday apologizing for his silence -- and explaining why PlantLab “completely imploded.”
It all seems to boil down to one simple thing: There wasn’t enough money, and he wrote that he spent what funds the company did have to “bandage problems” rather than fix them effectively. He wrote that due to “growing financial setbacks” such as high weekly expenses and overhead, as well as the need for more capital, he took on soaring debts -- including a number of merchant cash advances (MCA), which offer fast cash in exchange for a percentage of future sales and are typically accompanied by high interest rates. According to Zucker, those debited portions of sales eventually totaled more than $20,000 per day at one point.
Between June and August, Zucker wrote, he took loans from his parents, brother-in-law and friends in New York and Los Angeles totaling $470,000. “I have no ability to pay [them] back at this point,” he wrote. “This is all in addition to the money which was loaned to the company from investors.”
But PlantLab’s financial woes weren’t contained within the company. The hundreds of students who paid for plant-based cooking courses such as “Raw Desserts” and “Essentials of Superfoods” are now out thousands of dollars with no promise of a refund.
Natalie Golba, an on-site student at PlantLab’s Venice location, said she prepaid for three courses and was in the middle of the second when the company emailed students saying courses were discontinued. To get a discount, Golba paid $10,000 in advance for the courses instead of the retail value of $17,000. “I paid Adam cash and never got the receipt, which was strange,” she said. “I wrote to Adam, asked him to give it back … but he didn’t reply."
Another student, who asked to remain anonymous due to a potential forthcoming lawsuit, said she was a student from the Matthew Kenney Cuisine era and has yet to complete the third course she prepaid for. “I was never informed when the company changed ownership, nor were any terms and conditions sent to me about this,” she said. “I’ve tried unsuccessfully to reach PlantLab about setting up my Level III course. … I was thinking about a career change … [but] the whole experience left both me and a colleague with such a bad impression.”
One student-to-be from Croatia, Dijana Sinovcic, said she had booked three courses at PlantLab’s Los Angeles location starting in Jan. 2019. She said she invested the majority of her savings in the tuition -- which cost her almost $10,000 -- and transferred her current business to her partner since she had planned to not be in Croatia.
In an interview with Entrepreneur on Thursday, Zucker said not being able to refund students immediately is “killing” him. “I don’t have a dollar to my name,” he said. “I’m doing everything possible to make it right by them.”
One former employee, who asked to remain anonymous for fear of repercussions, worked with Zucker during his entire time at Matthew Kenney Cuisine and a few months after he bought PlantLab. The employee said working under Zucker raised “red flags” -- such as his emphasis on bringing in money fast and a requirement for employees to be available 24/7, as well as his seeming lack of experience in culinary education -- but since no one seemed aware that Zucker was the sole owner of PlantLab, employees weren’t concerned at the time.
“It just became a very, very chaotic workplace, and now I know it’s because he was ... worrying that he was going to be locked up,” said the employee, who left a few months after Zucker purchased PlantLab.
Former PlantLab employee Shannon Bronson said she resigned from her position Friday after several days of “the most stress we’ve ever felt.”
“Our CEO, Adam Zucker, seemingly disappeared for a week but was actually in jail for multiple charges of money laundering, embezzlement and tax evasion from previous employers,” Bronson wrote on Instagram. “You can imagine our shock when suddenly he went missing and none of the rents at our academies had been paid, amongst so, so many other terrifying discoveries. He was the only person in charge of the company’s money management, and now we can see why.”
On social media, Bronson wrote that employees were forced to stop operating in a matter of days and the company fell apart quickly. She wrote that she could have never imagined Zucker was capable of this behavior.
“I have never experienced such a sense of betrayal, manipulation and insanity in my life,” she wrote. “To all the people hurt in the trail of his mess, I’m so very sorry. We are in the same boat and we feel for you.”
In his Wednesday email to employees, Zucker wrote that he was searching for a company or person who would take over PlantLab, re-hire employees and “cure” student issues.
“I would not be involved,” he wrote.
This story is developing and may be updated.