By Jaimie Julia Winters
Last week Montclair’s posh pacifier entrepreneur was supposed to be launching a new product, but instead Nicki Radzeley’s newly manufactured sun and rain teething rings sat in a shipping container in customs.
A glitch with U.S. sanctions shut down her company’s bank account with JP Morgan Chase Bank and wreaked havoc on her credit over a supposed North Korean mix-up.
Radzeley’s company Doodle & Co created and manufacturers The Pop, a pacifier made from silicone, and designed so that when it falls out of a baby’s mouth, it pops back into its own self-protective bubble. The Pop was featured on Shark Tank and won the Juvenile Products Manufacturing Association Innovation Award. The company has since grown into a $1 million company with a small scrappy team of moms running the business out of their homes throughout the U.S. The product has been selling off the shelves of Bye Bye Baby, Nordstrom and local baby boutiques throughout the U.S. since its launch last year. The teething ring was supposed to be launched the week of May 7. But business came to a halt for Doodle on April 18, when a call came in from her banker at JP Morgan Chase’s Watchung Avenue branch asking if her company had any connections to North Korea.
“I said no, laughed it off and drove my kids to baseball practice,” she said.
The Montclair resident co-founded the pacifier company about a year and a half ago with fellow mother Janna Badger, who at the time was living in Seoul, South Korea when she invented and patented The Pop. Production of the pacifier is done in China at the only factory able to make The Pop, which is a bubble inside a bubble inside a circle. Safety testing is also done with a Chinese Brooklyn-based company. China and South Korea are not on a list of countries sanctioned by the U.S. and Badger now lives in Salt Lake City. Currently, the Office of Foreign Assets Control (OFAC) lists the Crimea region, Cuba, Iran, North Korea, Sudan and Syria as sanctioned countries.
The day after the call from bank, she discovered her business bank card would not work. A bank associate told her the account was apparently blocked, but provided no reason why.
Radzeley made a call to a business account banker who told her Chase was ending its business with Doodle and to pick up a check in the amount of $150,000, the amount in the account. Again, the man on the other end of the phone provided her with no reason for the bank’s decision, only that she was lucky to be able to get her at money at all, which is not the usually the case with red-alert accounts, she said. He told her she should expect a letter in the mail with an explanation.
On Saturday, April 21, she awoke to her phone blowing up with alerts from vendors that her payments were not going through. Apparently the bank not only shut down the account, but also discontinued the company’s credit and placed a red alert on the company’s credit rating. Radzeley and Badger began to panic as they saw their business slowly unraveling, bills and payroll going unpaid and collections uncollected with no place to deposit.
“I felt like I was in ‘The Handmaid’s Tale,’” Radzeley said. “You wake up one morning and everything has changed. Life as you know it is gone. If this can happen to a group of moms who make pacifiers, it can happen to anyone.”
Radzeley searched for another bank for Doodle and waited for approval of an application with Citibank. Frantically, she called federal agencies including the FBI. An official at the Office of Foreign Assets Control told her banks can end accounts “at will.”
By Monday, her online bank account rejected her login and password; her account simply didn’t exist anymore. The bank stopped taking her calls.
JP Morgan Chase’s website states, “OFAC sanctions prohibit or restrict JP Morgan Chase (JPMC) from engaging in activity that involves sanctioned persons or comprehensively sanctioned countries and regions. … JPMC is prohibited from engaging in or facilitating transactions that have any connection to these countries or region, unless such activity is exempt from the prohibitions or is subject to a general or specific OFAC license. Except as specifically authorized or permitted by OFAC and other applicable sanctions regulations, JPMC customers must ensure that none of their investments, services, goods or trade involving sanctioned persons, countries or regions are sent to or processed through JPMC, or are funded or otherwise facilitated by financing provided by JPMC. JPMC will take appropriate action, including potentially blocking (i.e., freezing) or rejecting funds, with respect to transactions that appear to violate applicable sanctions.”
But where was Doodle’s connection to North Korea or any other sanctioned country? No one had an answer.
Then on May 2, Radzeley said she received a call from a representative at JP Morgan Chase apologizing for the “mix up.” Just as quickly as it was shut down, the account was unfrozen. It was all a misunderstanding, the woman on the other end of phone said.
“But we were drowning in charges and fees,” said Radzeley.
Radzeley’s company had its money out of Chase after Citbank opened an account for them. But they wanted Chase to reimburse them for the $75,000 in fees the company had racked up, and to also clear their credit. A Chase official turned down their request for damages and were told the attorneys would work through it.
“We didn’t have the money or the time for this legal quagmire. We needed a resolution now,” said Radzeley.
Vendors and distributors have been understanding, she said, but without credit to pay invoices and with their product stuck in customs the company is at a standstill.
Radzeley thinks she knows where the red flag initiated. In February, she attempted to pay her safety testing company in China. But the company’s name was too long for the field, so instead of LLC, it was left at LL. The payment got kicked back twice. The payment was finally made through the manufacturing company, which then in turn paid the safety company. In the end, she says it could have been a simple clerical error that her business is still dealing with today, though the North Korean question remains a mystery.