Defendants Named as Part of "Operation Misprint"
Two Illinois-based companies named in a 1999 lawsuit filed by the Department of Justice at the request of the Federal Trade Commission have agreed to settle charges that they engaged in a bogus office and maintenance supply scam. The FTC sued Nationwide Industrial Technologies Company, Inc., also known as Nationwide Lighting & Supply Company, Inc., and its owner, Darrell Clark; and sued United Maintenance Supplies, Inc., and its owner, Sonia Pisano, her son, Armando Piemonte and former business manager, Daniel Martino, as part of "Operation Misprint." The FTC had alleged that the defendants made numerous misrepresentations for the non-durable office supplies they sold in violation of the FTC Act and the Telemarketing Sales Rule (TSR). The settlements announced today prohibit the defendants from making any misrepresentations concerning the sale of non-durable office, janitorial or cleaning supplies, and from making misrepresentations concerning any fact material to a consumer’s decision to purchase a good or service from the defendants. The settlements end the litigation of these matters.
In December 1999, the FTC announced "Operation Misprint"-- a multi-agency effort to crack down on bogus office and maintenance supply telemarketing schemes that targeted large and small businesses and non-profit organizations. In both cases, the defendants would ship unordered goods and represent that the businesses had in fact ordered the goods and were obligated to pay for them at prices that exceeded the market rates.
Nationwide sold non-durable office supplies, primarily light bulbs, to consumers nationwide. According to the FTC’s complaint, the defendants’ telemarketers would call consumers and pretend to be the consumer’s regular supplier. They would get the name of the person in charge of ordering supplies, then ship unordered merchandise, along with an invoice listing that person’s name. Often the consumer would pay for one or more shipments of supplies before discovering either that the supplies were not ordered, or that Nationwide was not the regular supplier. When the consumer complained, the defendants’ representatives stated that the supplies had in fact been ordered and that they had a tape recording confirming the order. However, they refused to produce copies of the tape when the consumers requested them.
The FTC’s complaint against United Maintenance also alleged that the defendants shipped unordered goods, typically cleaning supplies, to businesses and other organizations, representing that the recipients had in fact ordered the goods and that they were obligated to pay for the goods at prices that exceeded the market rate. United Maintenance’s telemarketers would induce consumers to consent to a shipment of office supplies by falsely representing that the products were "free samples."
The defendants in both cases have agreed to Court orders that prohibit them from violating the FTC Act and the TSR in the future. Specifically, the Court orders prohibit the defendants from:
- misrepresenting that consumers had ordered supplies that they shipped and/or billed to them;
- misrepresenting any fact material to consumers’ decisions to purchase;
- shipping unordered merchandise;
- shipping goods to consumers without first obtaining their authorization unless a disclosure is attached indicating that the goods may be treated as a gift;
- failing to disclose the sales purpose of the call; and
- making false and misleading statements to induce payment for the supplies.
The defendants lack assets sufficient to pay civil penalties or redress. The settlements, however, contain "right to reopen" provisions that permit the FTC to obtain additional remedies, including monetary relief, in the event that the FTC finds that the defendants made omissions or misrepresentations in their financial disclosures. Finally, the settlements contain various recordkeeping requirements to assist the FTC in monitoring the defendants’ compliance.
The Commission vote to authorize staff to refer the two settlements to the Department of Justice for filing was 5-0. The two settlements were filed in the U.S. District Court for the Northern District of Illinois, Eastern Division, in Chicago, by the Department of Justice at the request of the FTC. Both settlements were signed by the judges on February 6, 2001.
NOTE: These stipulated judgments and orders are for settlement purposes only and do not constitute an admission by the defendants of a law violation. Consent judgments have the force of law when signed by the judge.
Copies of the stipulated judgments and orders in these two cases will be available shortly, and copies of other documents pertaining to "Operation Misprint" from the FTC’s web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the online complaint form. The FTC enters Internet, telemarketing and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies worldwide.
(Nationwide Industrial- FTC Matter No. X000013; Civil Action No. 99 C 8164)
(United Maintenance-FTC Matter No. X000014; Civil Action No. 99 C 8163)
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