Karate school closes all locations, leaving customers out thousands of dollars | Troubleshooters

PHILADELPHIA (WPVI) -- We have an update on a kid's program that the Action News Troubleshooters reported on in the fall. Dramatic developments have unfolded.

Our first story about Castelli's Shin Karate involved its summer camp in Newtown Square. The very day our report aired in September, the school shut down that location, and now all three Shin Karate locations have closed, leaving families demanding their money back, especially those who pre-paid for a three-year Master's Club program.

Back in September, the Troubleshooters told you some parents were demanding refunds for the summer camp Castelli's Shin Karate was operating out of its school in Newtown Square. Families told us their children's experience was not as advertised.

RELATED: Some Delaware County parents have concerns over karate camp | Troubleshooters

"I am mad. I'm upset. We're not rich people by any means," said Mike O'Neill.

In September, Shin Karate told us Newtown Square's year-round program was continuing to operate under a new staff, despite litigation with the building's landlord.

But the very day our story aired, the business sent an email to families, saying, "Newtown Square will be closing its doors effective immediately" due to "defamatory allegations" brought by a former employee.

It was the second school Shin Karate closed in as many months. Its Richboro location was the first to shutter back in August.

"There's a lot of promises that were said to us but never fulfilled," said Brian Lee.

Sun and Brian Lee said in 2022 and 2023, they pre-paid more than $7,000 for classes for their children at the Richboro location, but then they received an email that the school was closed effective immediately.

"We already pre-paid in full for three years in training. And then now we have to go to someplace else to train again. So then pay additional money on top of that," said the Lees.

The Lees said they want their money back from Shin Karate.

But Shin Karate's attorney said the Lees will not be getting refunds because the original agreement they signed was with a different owner and Castelli did not receive the Lee's money.

But the Lee's credit card statements show they paid Shin Karate after Castelli took over.

Previously, the attorney for Shin Karate told the Troubleshooters whether refunds will be given to those signed up at the now-shuttered Newtown Square location is being reviewed on a member-by-member basis because many have outstanding balances.

As for students who attended the South Philadelphia location, the attorney told us "all members ((there)) have been notified and have agreed to be transferred to another karate school. All members holding any credit are receiving full credit at the new location."

The latest statement from the attorney says, "All clients that paid by credit card received a refund. The O'Neil's also received a refund, but our client is disputing their refund. Regarding Lily Lee, there is a legitimate dispute, however our client has offered to settle with her. Students had the opportunity to go to any location they wanted. Our client has not had any correspondence with those students and so he does not know where they ended up. Shin Karate Philadelphia and Castelli Shin Karate are no longer operating and in business at any locations anywhere."