Action News 5 Investigates: Snack Shack Undercover

By Anna Marie Hartman - bio | email | Twitter | Facebook

MEMPHIS, TN (WMC-TV) - A South Memphis business owner says illegal snack shacks are about to put him out of business.  For store owner Kelly Karzom, the 'American Dream' feels more like a nightmare lately.

"I've been here about two and a half years now, and everything's been okay until about six months ago," he said.

That was when Karzom noticed a steady drop in customers.  He blamed it on the recession until his employees told him about some new competition down the street at the Willow Oaks Apartments.

"They have everything, I mean everything I have in my store they have it over there," he said.

Undercover video recorded by Action News 5 confirmed all sorts of snacks are being sold inside one of the units at the apartment complex. When videographer Doug Hexamer went inside. he was shocked at what he saw.

"They were selling cowboy boots," Hexamer said. "They were selling canned items, and had an actual commercial cooler to put the soda in."

"It's like street business," Karzom said. "I mean, it's black market or something."

Karzom claims customers can even buy alcohol in the apartment.

"Shot vodka if you want it, you can buy it over there," he said.

We didn't see any alcohol, but we did uncover a sign that, when translated, read, 'We sell shots of frozen alcohol - chocolate, mango, and pina colada - for a dollar a piece.'

Karzom says he had told the health department about everything in the apartment.  So what did health inspectors find?

"Individuals in four apartments that had those products in their apartments, and they admitted they had been selling those products," Health Inspector Otho Sawyer said.

But, Otho Sawyer added, health inspectors didn't witness any sales, so they could only warn residents to stop the activity or face consequences.

The warning didn't work. Weeks after health inspectors visited the property, the Action News Five Investigators witnessed business as usual on three different occasions.

With an undercover camera we asked a leasing office employee if she knew what was going on.

"We know it has, we've tried to make them stop but it's a lot of them," the unidentified employee said.

The employee said the apartment's manager would contact us, but that person never did.  Meanwhile, according to Sawyer, apartment managers have been put on notice.

"We wanted to make sure they understood that they are promoting an illegal activity by authorizing sales in an apartment," he said.

For Karzom, notice isn't enough, and he wants the illegal business shut down before his own business goes under.

"Somebody should take it serious and do something about it and stop it," he said.

UPDATE:  After the Action News Five Investigators shared their information with the Health Department and law enforcement, the snack shack was shut down Friday.  The store's operator and a leasing agent at Willow Oaks were both cited.  They now have a date in Environmental Court later this month.

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