Craft breweries nationwide accuse Canton company of ripping them off
By Rick Armon
Beacon Journal/Ohio.com
Eric Kinsey and Mike Poland were nervous and excited.

The two friends had dreamed for years about opening a brewery in Dover and in March handed over $40,000 as a down payment to a Canton company toward their new five-barrel brewing system.

Hoodletown Brewing Co., located near downtown in a red brick building along the railroad tracks, would become a reality with help from SysTech Stainless Works, a firm that promised American-made equipment at an affordable price.

“We had a good feeling,” said Poland, who heads manufacturing at a local plastics company.

That positive feeling didn’t last long.

Poland and Kinsey are now part of a group of breweries around the United States that are accusing SysTech and founders Jason and Amanda Spurrell of ripping them off — either by providing shoddy equipment or, as in the case of Hoodletown, delivering no equipment at all.

The company went out of business suddenly in mid-September, telling customers in phone conferences that their deposits were gone and if they wanted equipment in the future to get it from a Chinese manufacturer that it had lined up — salt in the wound for brewers who were proud to be buying American-made products.

SysTech and the Spurrells are now the focus of a police investigation by Dover and Tuscarawas County authorities who last week asked the Ohio Attorney General’s Office to get involved because of the widespread and complicated financial nature of the accusations.

At least one civil lawsuit alleging breach of contract also has been filed against SysTech and the Spurrells.

Breweries in states as far away as California, Florida, New Mexico and Minnesota are wondering what happened to their money and what went wrong with a company that a year ago was bragging to the Canton Repository newspaper about how it was on the way to tripling production and growing its workforce.

John Degnaro, owner of Bombs Away Beer Co. in Albuquerque, N.M., who says he lost a $30,000 deposit, called the Spurrells “horrible people.”

“I really think they have directly stolen this money from the breweries,” he said. “… I don’t see how that amount of money can just disappear so quickly in a manufacturing business.”

The breweries affected have formed an email support group, estimating that there are at least 20 of them around the country.

The Spurrells, who opened the Final Gravity Home Brew shop on Portage Street Northwest in Jackson Township earlier this year, did not respond to a request for comment for this story. A Beacon Journal reporter stopped by the shop last week but they were not there.

A man working at the store promised to pass along a business card left for the Spurrells.

The Spurrells’ Canton attorney, Gerald Baker, also did not respond to a phone message last week seeking comment.

Complaints

Since SysTech closed, five breweries have filed complaints with the Ohio Attorney General’s Office and one brewery has filed a breach of contract lawsuit in Stark County Common Pleas Court.

In addition to Hoodletown, the following breweries sought help from the attorney general: Lock 15 Brewing Co. in Akron, Moose Lake Brewing Co. in Moose Lake, Minn., Sideways Farm & Brewery in Etowah, N.C., and A Little Madness Brewing Co. in Pensacola, Fla.

In paperwork filed with the attorney general, each brewery claimed it lost anywhere from $29,336 to $51,750 in deposits.

Lock 15 declined to comment for this story.

There are many others — based on the email support group and numerous interviews with the Beacon Journal — who were affected that haven’t filed complaints.

Dover police detective Jason Peters confirmed that authorities are investigating and have asked the attorney general’s Bureau of Criminal Investigation to assist.

He declined to comment further, saying it’s a pending investigation.

Attorney general spokeswoman Eve Mueller said BCI hasn’t decided yet whether it will take on the case.

Who was SysTech?

The Spurrells built their company fast.

According to a story last year in the Canton Repository, SysTech began in 2014 in the basement of the couple’s Jackson Township home, where they at first used components from China to assemble small brewing systems and sell them online.

Before launching the company, Jason Spurrell, 32, worked as an electrician and subcontractor, according to a media report.

SysTech outgrew the basement and moved to Wadsworth and then Canton.

The company found plenty of eager customers. The United States has been experiencing a craft brewery boom, with the number of breweries more than doubling over the last five years to more than 5,300.

Many suppliers have popped up in recent years to feed the resulting need for brewing equipment.

Most of the new breweries are small businesses, with some pumping their life savings into their operations.

“[The Spurrells have] pretty much preyed on people that are startups and would not have the means to come after them legally to sue them for the money,” said Degnaro, the brewer from New Mexico. “These are all small mom-and-pop operations. These are not big operations that can recover easily.”

The Spurrells opened Final Gravity Home Brew at the same time that SysTech was failing, leaving many brewers to question whether their deposits were going to launch the separate business. They also formed another company called Ace Metalworks, which was incorporated in June and dissolved in August, according to state business records.

Massillon Municipal Court records show that the Spurrells were served with eviction papers for their home in December 2016 for not paying rent. The case was dismissed in November.

The breach of contract lawsuit filed in Stark County by A Little Madness, which is seeking an undetermined amount of damages, and interviews with breweries reveal the hardships the brewers say have been created by SysTech.

Many brewers described constantly getting the runaround from the company, especially when it came to timelines for equipment being built and delivered.

“Somewhere along the way I don’t think [Jason Spurrell] knew what the truth was,” Hoodletown’s Poland said. “He … just wanted to say the right thing so he didn’t have to be in that uncomfortable situation time and time again.”

In many cases, breweries had to delay openings and lose out on revenue.

Hoodletown had hoped to open this fall and is now shooting for the spring.

Kinsey and Poland also had to spend an additional $40,000 to buy equipment from Stout Tanks and Kettles in Portland, Ore., because they said they didn’t trust Jason Spurrell and the Chinese company he had hooked them up with. They received four fermenters already from Stout and have been happy with the company.

“At the end of the day, sending any more money to China without having any recourse, we said we couldn’t do it,” Poland said last week during a lengthy interview at their brewery.

This time, Hoodletown did its homework, asking for references from customers and Stout’s bank.

But the loss of $40,000 hurt.

Kinsey and Poland bought only four fermenters and put off buying a fifth tank. They also are delaying plans to add a patio and other upgrades.

Kinsey and Poland, and their wives, Kari and Autumn, remain upset.

“We’re not independently wealthy individuals here,” Autumn Poland said. “I can’t think about it. We have two kids getting ready to go to college. We’ve lost a lot of sleep.”

At one point, they even thought about picketing outside the Spurrells’ homebrew shop.

“It’s crazy that someone can do this and get away with it,” Kari Kinsey said.

Unhappy customers

Even some breweries that received their equipment are unhappy.

READ MORE HERE