'They hate me right now': Allegations fly in family drama spilling out of My Sister's Closet

The youngest sister says she quit to seek treatment for post-traumatic stress disorder. The middle sister says she was fired and cheated out of hundreds of thousands of dollars. The oldest sister says her siblings are liars and trying to sabotage her company.

This is what the inside of My Sister's Closet looks like. Hidden behind displays of brand-name merchandise and racks of designer clothes is a tangle of litigation, accusations and acrimony that shoppers at the iconic consignment stores can't see.

The owner's two younger sisters say she deprived them of company profits while she bought luxury vehicles and multimillion-dollar homes in Arizona and California.

They claimed CEO and founder Ann Siner ran the stores with an iron fist and used the business to control the most important aspects of their financial lives, including their salaries, home purchases, cars and bank balances.

Jennifer Siner and Tess Loo said Ann treated them with the same contempt she showed customers who complained about the handling of their merchandise and employees who were harassed and berated.

Some former employees corroborated the sisters' claims in interviews and in online forums. Consumer protection websites brim with customer complaints about lost items and unfair payments, which Ann disputes.

Jennifer and Tess said Ann imposed a deceptive fee on people who sold merchandise at the stores. Those customer contracts were revised days after The Arizona Republic questioned Ann about the previously undisclosed fee.

The sisters also accuse Ann of wrongly siphoning merchandise from My Sister's Closet into a nonprofit thrift shop to boost her profile as a philanthropist. Clothes belonging to consigners often were sent to the thrift shop without first being put up for sale, they said.

Jennifer and Tess said they know, because they helped her to do it.

Ann, meanwhile, accused her sisters of committing crimes involving the company and said neither could be trusted.

She said she gave them wonderful benefits and opportunities, but neither was satisfied.

"They hate me right now," Ann said of the sisters who worked alongside her for years. "They're not gonna say anything nice and they are just gonna throw out every name in the book."

Ann, Tess and Jennifer are locked in a three-way legal battle. The younger sisters contend Ann for years defrauded them of valuable company dividends they were owed as shareholders.

They said, in general, Ann gave them just enough dividend money to pay their income taxes each year.

It wasn't until they filed court claims in 2022 that Ann provided a host of financial documents that shareholders are supposed to receive by law.

The dispute is more than just another wealthy family legal drama. It gives consumers a troubling look at one of Arizona's most recognized consignment businesses. It raises questions about the handling of merchandise and the treatment of retail employees who said they faced bullying and hostile conditions.

The high-stakes sister squabble is playing out in public and private arenas, with each side enlisting the courts and law enforcement agencies as proxies in their escalating efforts to discredit the other.

Jennifer said Ann tricked her into selling her company shares for far less than they were worth. Ann accused Jennifer of quitting as part of a scheme to manipulate the state of California into paying her salary while she received inpatient therapy.

Jennifer said she quit in 2019 to receive therapy for PTSD brought on by Ann's abuse. Ann described Jennifer as a disgruntled employee.

"I worked there for 28 years. It was the only job I ever had. It was my life's work," Jennifer said. "My older sister, my closest sister, was not who she pretended to be. ... I watched her abuse staff, customers. Then I became her whipping boy, the hated one."

Tess and Ann continued the accusatory volleys.

Ann fired Tess without warning in 2022. Tess got a public relations firm to pass out flyers at stores asking employees to share stories about being "verbally abused, tormented, intimidated, discriminated against, belittled or fired for no reason."

Ann filed a police report accusing Tess of theft. Tess reported Ann to U.S. Immigration and Customs Enforcement, accusing her of hiring undocumented immigrants.

"She's going to tell you I was useless, worthless, didn't do my job, because that's what she says about every single person that she has fired or let go, and there have been hundreds over the years," Tess said.

"I think things have just come to a head because I started standing up for people that were being bullied and abused."

Ann said litigation prevents her from commenting on her sisters' specific allegations. But she is adamant that she did not take advantage of her sisters or her customers.

Ann said she took Jennifer, Tess and their daughters on trips and opened her house for each of her sisters to stay during transitions in their lives. She said the company financed their homes and paid for their vehicles.

"You understand they've got a $6 million lawsuit against me," she said. "I can't say anything."

Ann said she is saddened that her relationship with her sisters has turned litigious.

"We used to have so much fun working together," she said.

Her sisters described Ann's treatment as exploitive. They said she held the gifts over their heads as a way to control them.

"It could have been a beautiful thing between three sisters," Tess said. "Then greed kicked in."

Fallout from family drama: Customers were cheated, employees mistreated at My Sister's Closet, owner's siblings claim

My Sister's Closet becomes financial juggernaut

Ann, at 65, is the oldest sister. She is the driving force behind the business.

For years, she described herself as the "co-founder" of My Sister's Closet, or even one-half of the two sisters behind the consignment stores.

More recently, she has excluded her sisters from her personal narrative. On the company's website, an executive profile charts Ann's decision "to open her first designer consignment store" in singular terms.

Ann's court filings put it more bluntly, saying she started the stores and later made Jennifer an employee.

"I've worked seven days a week. I've worked my whole life," Ann told The Republic. "I didn't take repeated time off. I am the founder. It was my idea. I signed the leases. ... I put my name, my money, on the line."

The company's "about us" page stands in contrast. There, Ann recounts how she and Jennifer scraped together money to open the first Phoenix store in 1991 with a vision of reimagining the secondhand retail business. Tess joined the company in 2010.

"We decided to open My Sister’s Closet after asking ourselves why resale stores were always dark, dirty and dingy," Ann writes on the site. "Why couldn’t they look like new boutiques? We dedicated ourselves to turning the “three d’s” – dark, dirty and dingy – into the “three c’s” – cute, clean and current."

Ann earned an MBA from the Thunderbird Global School of Management in 1984 and was working as the director of marketing for PetSmart when she said the idea for the new business struck her. Her vision could be summed up in a word: upscale.

My Sister's Closet is marketed as a boutique for secondhand clothes, jewelry, handbags, shoes and other accessories. It seeks brand names and won't take anything that retailed for less than $75 and older than five years.

Ann and Jennifer opened a second store in Scottsdale in 1997 and continued expanding, eventually branching out into men's clothing and furniture. Going into the pandemic, they had a chain of 14 stores operating under the umbrella of Eco-Chic Consignments Inc.

My Sister's Closet, Well Suited and My Sister's Attic ― now with 10 locations in Arizona and Southern California ― generated an estimated $30 million in annual revenue, Ann said in a 2021 interview.

It appeared to be a family success story for the three sisters from Colorado. Each had taken a different path: Ann to a thriving business career; Jennifer and Tess to marriage, then motherhood and divorce. But they had arrived at the same destination in middle age.

Ann from the start exercised almost sole ownership of the company and exclusive control over profits, holding more than 90% of the company's stock and gifting her sisters less than 10% of shares as value soared.

While Jennifer and Tess received about $100,000 a year each as salaried employees, Ann made headlines for donating millions of dollars raised through the company to charitable causes she supports.

She was photographed in June handing out an oversized check for $52,600 to Fresh Start Women's Foundation (where she is a board member), which seeks to help women achieve financial independence.

The money came from My Sister's Charities in Chandler, a thrift shop that sells merchandise from the consignment stores at steep discounts. The thrift store brought in $403,000 in 2019, according to the most recently available tax forms.

Ann was named "Queen of Barks" in October by the Arizona Humane Society, where she was a longtime board member, for a lifetime of giving that the organization said exceeded $1.5 million.

"I have three- and four-legged children, and that's perfect," said Ann, who once had a room for the cats she adopted.

The Phoenix Business Journal in 2018 took viewers on a video tour of Ann's $1.8 million Paradise Valley home for a segment called "Cribs."

Ann narrated as she walked beneath Spanish-style arches, pointing out the ornate tiles and hand-painted artisan flourishes. She showed off her walk-in closets, with a display case of purses and color-coordinated shoe racks.

"We took My Sister's Attic and furnished 80% to 90% of what we have in the house," she said.

Ann said she paid for the furniture using a special form of tender called a promo certificate, essentially store credit she issued to herself.

"The coolest thing about my front yard is that you just want to be out there all the time, living in the courtyard," she said in the video. "It's got a fireplace. It's got really comfortable furniture, all from My Sister's Attic."

Toward the end of the video, Ann gets into a convertible F-type Jaguar, saying she just had to have it.

Jennifer: 'She was like my mom. I trusted her'

Jennifer, at 55, is the youngest sister. She worked alongside Ann for nearly three decades at Eco-Chic Consignments.

Jennifer was 24 years old and attending art school in Arizona when Ann approached her about starting the business.

Jennifer said she believed she and Ann were in the business together, at least they were supposed to be. Both of their names were on the paperwork when Eco-Chic was incorporated in 1999 ― Ann as president, Jennifer as vice president. They shared management duties, running the store, planning events, overseeing employees.

"I was her right-hand man," Jennifer said.

Jennifer said she looked up to Ann as her "big sister." She said she was in awe of Ann, describing her sister as savvy, fearless and driven. So Jennifer tried to match her sister in other ways, pouring herself into the business hour upon hour, day after day.

By the time she quit, Jennifer said she saw something else in her sister: "She's evil."

Jennifer said she never considered herself Ann's equal but came to believe she was actually her sister's victim.

"Money is her lover, her god. It is everything to her," Jennifer said.

Ann was making enough money to buy things Jennifer only could dream about: the Paradise Valley mansion; a $4 million home overlooking the ocean in Del Mar, California; the Jaguar; a Lamborghini.

Jennifer said she never gave much thought to her salary, or to her stake in the company. In 2001, Ann gave her a 7.8% ownership interest. Jennifer never questioned why it wasn't more. She deferred to Ann on most important financial decisions.

Jennifer said she relied on Ann for employment and paychecks. Ann owned Jennifer's car. Ann financed Jennifer's California home.

"I didn't know what I didn't know, and I was afraid to ask," Jennifer said. "I don't know too many people who are not afraid of her."

As business grew, Jennifer said, Ann demanded more. More time, more work, more sales. Jennifer said her sister heaped abuse upon her daily: Ann screamed, Ann ranted, Ann insulted.

It was no different than the way Ann treated employees, Jennifer said. She recalled times she would turn away, desperate to avoid confrontation, as Ann castigated employees for being "too fat" or "too stupid."

In 2017, Jennifer said she negotiated with Ann to oversee My Sister's Closet and My Sister's Attic in Encinitas, California, mostly to get out from under her sister's thumb.

Whatever relief Jennifer thought she would find was short-lived. She said Ann's abuse increased, and so, too, did her leverage.

Jennifer called it her "dream house": the $625,000 top floor of a San Diego townhouse. The property was secured with a low-interest $500,000 loan from Eco-Chic. As long as Jennifer worked, she was able to make the payments, something she said Ann wouldn't let her forget.

"She held it over me, all the time," Jennifer said.

In 2019, she opted for therapy and walked away from her job and the townhouse. And at her most vulnerable, Jennifer said, Ann went after her remaining asset, the Eco-Chic shares. Jennifer accepted Ann's valuation, sold her shares and signed a nondisclosure agreement that prohibits her from discussing the amount.

Three years later, Jennifer sued her sister, claiming Ann fraudulently induced her to sell her shares for less than they were worth. Jennifer said she signed the contract while under duress "due to PTSD, mental anguish, trauma and harassment."

"The buyout was nothing more than what (Ann) donates to charity in a year," the lawsuit stated. "A little bit over twice what Ann paid for a car in cash that year for herself."

The lawsuit, filed in Maricopa County Superior Court, also claimed Jennifer did not receive rightful dividends from the company. It accused Ann of taking millions in cash disbursements without giving Jennifer the percentage owed to her. For example, if Ann took a $2 million cash distribution to buy a new home, Jennifer did not receive $156,000 as a proportional distribution, according to the lawsuit.

Rather than provide regular disbursements, Ann directed her accountants to use the funds to pay Jennifer's taxes each year, according to the lawsuit. A review of tax returns after Jennifer left the company showed her getting tens of thousands of dollars in disbursements that never actually were paid out, according to the lawsuit.

"Jennifer did not know what ownership meant. Jennifer was unaware she was to receive regular ownership distributions (dividends) and did not know of her rights as shareholder, director and officer," the lawsuit said. "All she knew is defendant now started to prepare her personal tax returns for her, and her tax returns were 'beyond complicated.'"

Ann challenged Jennifer's story. She said Jennifer's dream house already was paid off when she quit. Ann said Jennifer used the townhouse to get into the real estate flipping business.

"I will tell you this because it's not employee-related," Ann said. "I told her, 'Don't sell it. It's paid off. You have no more (payments). All you have to do is pay your property taxes.'"

Jennifer said she had no financial option but to sell it. She said for years she did whatever Ann told her to do when it came to money, signing whatever paperwork Ann put in front of her. Why wouldn't she?

"She was my mom. She was like my mom," Jennifer said. "I trusted her."

Tess: 'I started talking back to her'

Tess, at 62, is the middle sister. She joined her sisters as her marriage fell apart and moved to Phoenix from Colorado in 2010.

Tess, who had owned a high-end traditional women's clothing store in Colorado Springs, said she was grateful to be able to start a new life with her sisters. She described it as a chance to start over.

"I didn't ask for anything," Tess said. "She (Ann) gave me a job and started me at $20 an hour."

Ann gave her the title of chief fashion officer. When My Sister's Closet opened a store in the swanky Biltmore Fashion Park in 2021, Tess helped make the case that consignment stores could compete with traditional luxury clothing retailers.

"I was the face of the company. I did all the television segments," Tess said. "I managed live selling on social media. ... I produced fashion shows, designed all our new stores, redesigned existing stores. ... I designed a lot of our advertising, and I was the one that helped to elevate the company's appearance."

As the stores thrived and her workload increased, Tess said she requested and got raises.

Eco-Chic financed the purchase of Tess' Arcadia home in 2016. She sold the house and paid off the loan in 2021. She then took out a $582,000 loan with Eco-Chic for a $745,000 condominium in Scottsdale.

In 2018, Ann gave Tess a 2% share of the company. It felt like a gift at the time, but Tess said it came with a price: more indebtedness to Ann. It also had serious tax implications.

Tess contends Ann cheated her out of hundreds of thousands of dollars. But she might never have sought an accounting if Ann hadn't fired her last year.

Tess, much like Jennifer, admitted being naïve about finances and ceding too much control to Ann. She said Ann held sway over her employment, her mortgage and her company stock.

As a 2% owner in the company, Tess said she received enough dividends each year to cover her income taxes. Tess said every year around tax time, Ann would tell her to expect a disbursement.

Tess said she never really considered it as income. The money went out almost as soon as it came in. Ann's accountant, the same one who had prepared Jennifer's taxes, also took care of her taxes, Tess said.

Shortly before she was fired, Tess said she got income statements from the company's accountant indicating she was paid $80,000 in dividends on top of her salary. It put her in a much higher tax bracket. The only problem, Tess said: She never actually got the money.

"I don't have a check for $80,000," Tess said, calling it a "phantom payment." She said she requested proof from Ann of the income. She didn't get it and ultimately filed a legal motion to compel the company to turn over a host of financial documents as a precursor to her own lawsuit.

Unlike Jennifer, Tess said she wasn't afraid to ask questions and challenge her sister on the answers, especially when it came to treatment of employees.

Tess said Ann ridiculed workers over their hairstyles, their clothes, their weight. When Ann got heavily involved in an Arizona anti-tax campaign, she practically insisted that her staff vote against the proposition, Tess said.

"You have to understand, this is a very hostile and oppressive work environment," she said, adding that it was common for employees to walk out the door crying. "She hurts people."

Tess said Ann fired employees without notice or explanation; they would simply show up for work and find out they no longer had a job.

Tess said she was fired in much the same way.

"I started talking back to her," Tess said. "And once you do that with my sister, you have a bull's-eye on your back and you're gone. The month of May alone before I was fired, there were five people that got let go for really no other reason than she just didn't like them."

Tess was fired in June. But five months later, just days after Tess filed her first legal claim, Ann accused Tess of theft. She claimed in a November report to Scottsdale police that Tess took more than $35,000 worth of merchandise from the store to sell online.

Ann told a detective that she had "given Tess numerous opportunities to stop defrauding the business and was finally forced to terminate her," according to the police report.

The police report was clearly retaliatory, Tess said. She said she was never given a reason for the firing.

Tess acknowledged selling online as far back as 2016, including on TheRealReal, a luxury consignment retailer. She said the items had nothing to do with My Sister's Closet. Tess said among the things Ann accused her of stealing was a monogrammed handbag she had bought for her daughter.

The detective in March listed the case as inactive and said it "will not be referred for criminal prosecution," according to the report.

Ann said she couldn't talk about the police report because it was part of litigation. She said the reason she waited months from the time Tess left to file the report was because "I needed to get my ducks in a row."

In addition to accusations of theft, Tess said Eco-Chic in October threatened to foreclose on her home. Tess said she had underpaid her mortgage because Eco-Chic owed her money.

The company maintained her account remained in default in March, according to emails Tess provided.

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Tess sold the house in April and moved to Kansas City, where he daughter lives. She said she is looking for work and a place to live in a city that is new to her. But Tess said it was worth it to get away from Ann's lies and allegations.

"You don't ever think your own sister is going to do these things, do you?" Tess said. "I am a kind, loving person. I hate conflict. I hate fighting. I loved my sister. But all I was was her slave."

Lawyer digs into financial documents, raises questions

Ann maintained she was generous to a fault with her sisters, and they benefited from the company she created.

Ann said she's the one who took all of the financial risks.

And Ann said she was the one who provided for their father.

"I was the one that paid for assisted living," Ann said. "I was the one that bought him a house for 30 years. I'm the one that made sure he had food."

Tess said her relationship with her father was troubled, rooted in his alcoholism and intense family fights. Ann took care of him financially, but Tess said she and Jennifer helped where they could.

Tess said her family history shouldn't matter; it has little to do with company shares and cash disbursements.

Scottsdale lawyer Todd Lencyzcki, who is also an accountant, is representing Jennifer and Tess. He said the sisters' attempts to get a proper accounting were met with retaliation.

He said the sisters received haphazard dividends, but mostly around tax time and for nearly the same amounts owed to the Internal Revenue Service. The company then offered to use the dividends to pay the sisters' taxes. The timing raises clear red flags, he said.

"That doesn't seem logical," Lencyzcki said. "What the evidence is showing is that there were some distributions made at other times."

Those were small and incremental, usually amounting to about $1,000. Lencyzcki described them as "scrub" payments.

"Chump change," he said.

Even accounting for Ann's position as the majority shareholder, the amounts to Jennifer and Tess do not match the percentage or frequency of which Ann was paid, Lencyzcki said.

The sisters' financial records raise legal concerns about the way Ann's company handled shareholder money, Lencyzcki said.

Neither Ann nor her lawyer would discuss the disbursements, citing the court case.

Lencyzcki said in court filings Eco-Chic admitted it could not produce minutes of any meeting of the board of directors or records related to any shareholder meetings.

"Defendant has admitted none exist," he said.

The sisters had little choice but to accept what Ann told them until they went to court, he said.

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A judge in March acknowledged Eco-Chic withheld financial documents until being forced to disclose them. But the judge refused to award attorneys' fees to Tess, saying she contributed to the stalemate.

"Eco-Chic met its burden of demonstrating that it delayed in producing portions of the requested documents in good faith and based upon legitimate concerns that Loo sought to use the information to harm the company," the judge said.

'Tell-all' threats and flyers about bullying

Ann accused Tess of trying to sabotage the company. She told the court she didn't withhold records from her sisters to keep them in the dark about finances but to protect her business.

She said Tess sought corporate records as part of a negative public relations campaign and had once threatened to write a "tell-all" book about My Sister's Closet.

Maricopa County Superior Court Judge Melissa Iyer Julian cited Tess' reluctance to sign a confidentiality agreement and pointed to a 2022 memo in which Tess said she was considering using her insider knowledge of Eco-Chic's operation to start a new company or to seek work with a competitor.

"Loo admittedly hired a public relations professional named Jason Rose to assist her and Loo admitted that Rose created a flyer about Siner/My Sister's Closet 'bullying' its employees and customers," Iyer Julian wrote.

"Rose also created a Twitter page/post criticizing the company and commenting on Siner's alleged mistreatment of her sisters," the judge wrote.

Rose is a public relations big wheel in Arizona. The president of Rose + Allyn Public & Online Relations, Rose has a host of celebrity clients, has spearheaded political campaigns and is often tapped to manage headline-making crises.

He said he was aware of what Tess was going through long before her lawyer hired him to help. He said he was moved by her situation.

"Tess gave her life to enhancing that brand," he said. "As I listened to her, the more I became convinced that Tess is being railroaded by her sister."

As a courtesy, he said he reached out to Ann last year and asked if there was a way to settle the dispute. He said Ann "unloaded" on him.

"Ann was offended that I made that decision to represent David instead of Goliath," he said. "Doesn't she understand the irony of making millions of dollars a year for a business called My Sister's Closet and using her financial advantage to bury her sister?"

He said the schism has upended Tess' life.

"She has no desire to harm the business. That's one of her babies, one of her children. She's standing up for herself against a bully," Rose said. "There's only one sister living in million-dollar mansions. There's only one sister driving around in a Lamborghini SUV."

Coming Thursday: Claims of cheating and mistreatment heat up at My Sister's Closet.

Robert Anglen is an investigative reporter for The Republic. Reach him at robert.anglen@arizonarepublic.com or 602-444-8694. Follow him on Twitter @robertanglen.

This article originally appeared on Arizona Republic: Sisters behind My Sister's Closet in Arizona embroiled in family drama