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Compass Coffee Co-Founder Sues Owners, Alleging Fraud

Compass_Coffee_Original_Location

The original Compass Coffee location in Washington D.C. “Compass Coffee Original Location” by Jackiegeorges92321 is licensed under CC BY-SA 4.0.

The co-founder of Washington D.C.-based specialty coffee chain Compass Coffee is accusing the company and two of its current owners of a multi-year fraud scheme, misuse of federal COVID-19 relief funds and various contract violations.

In the lawsuit, filed Jan. 13 in the U.S. District Court for the District of Columbia, Compass Coffee Co-Founder Harrison Suarez accuses fellow co-founder Michael Haft, his father, Robert Haft, and the company, Compass Coffee LLC, of engaging in a “pattern of defrauding business partners and others to unlawfully enrich themselves.”

The lawsuit claims that Suarez was terminated via email from Compass Coffee in July 2021 with little warning.

The defendants have not yet filed any legal defense in the case. Compass Coffee did not immediately return DCN’s request for comment. 

The lawsuit paints a vastly different picture than that put forth by the company’s marketing materials and media statements over the years. Suarez and Michael Haft met at Washington University in St. Louis and became close friends while serving in the United States Marine Corps. According to company lore, they bonded over a shared appreciation for coffee and determined to launch a coffee business upon their return to civilian life.

Compass Coffee launched in 2013, opening a flagship roastery location in the Shaw neighborhood in 2014. The company subsequently grew to at least 20 locations in the D.C. area.

According to the complaint, Suarez and Michael Haft each invested $100,000 to start Compass Coffee in 2013. Suarez alleges he was led to believe that a third investor — an entity named “Colby Bartlett LLC” — was solely controlled by Robert Haft, Michael’s father. The complaint claims that in actuality, that LLC’s ownership arrangement gave Michael Haft a larger stake in Compass Coffee than Suarez from the company’s inception.

“For years, Michael and Robert deceived Harrison into believing that he and Michael were equal partners in Compass. But they were not: Michael secretly owned a larger share of the business from the very beginning, concealing his ownership interest behind a web of LLCs,” the complaint states.

The lawsuit also details allegations of improper handling of federal pandemic relief funds totaling $10.5 million.  The suit alleges the defendants illegally used relief funds to pre-pay their own debt and make multiple investments, including in the chain Union Kitchen to boost Compass Coffee’s packaged goods business, and in a bitcoin venture.

According to the lawsuit, Suarez is seeking damages under the Racketeer Influenced and Corrupt Organizations Act (RICO), as well as compensatory damages for alleged fraud and breach of contract. Suarez has also requested a court order enforcing the repurchase of his shares in the company based on fair market value.


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