Defendant to Pay Consumer Redress and Return All Uncashed Checks to Consumers
Darrell Richmond, a South Carolina resident, was banned from engaging in work-at-home opportunities or business ventures as part of a settlement with the Federal Trade Commission. Richmond, using various company names, deceptively marketed his envelope stuffing business opportunity to consumers over the Internet. In its complaint, the FTC alleged that Richmond misrepresented that he would provide all necessary materials to perform the work-at-home envelope stuffing business opportunity, and misrepresented earnings claims. In addition to the ban, the settlement announced today prohibits Richmond from misrepresenting earnings claims, costs, and the type of assistance he will provide in connection with the sale of any good or service.
In November 2002, the Commission filed a complaint in federal district court alleging that Richmond promoted his business opportunity using the names: Bargain Shoppers Network Direct!, BSN Direct!, Speciality Merchandising Wholesale Direct!, SMW Direct! and Apex Direct Marketing Group, and Apex Enterprises, and on the Internet at: www.bsndirect.com, www.homemailerteam.com, and www.homemailergroup.com. The complaint alleged that Richmond advertised that “home mailers” were needed to stuff envelopes with circulars which allegedly advertised a wholesale and retail line of approximately 3,500 giftware and collectible items. Richmond allegedly offered to pay consumers $2 per envelope stuffed, stating that consumers could earn between $100 to $1,000 or more per week. He also promised that he would provide all the necessary materials to consumers at his own expense.
The proposed settlement bans Richmond from any work-at-home related sales activity, and prohibits him from misrepresenting, in connection with the sale of any good or service: the earnings claims likely to be achieved, or actually achieved; the type of assistance he will provide
to enable the consumer to achieve the represented earnings; the amount of time a person would
need to expend in order to achieve the represented earnings; the guarantee; and the existence of any pending orders for goods or services. The settlement also prohibits Richmond from selling his customer lists.
In addition, the settlement requires Richmond to pay as consumer redress all proceeds from the sale of his assets, including the sale of his house and automobile, and to return all uncashed checks to consumers within 20 days after entry of the order. The settlement contains an avalanche clause whereby Richmond would be liable for $782,668.77 if it is found that he made false statements in his financial disclosures. Finally, the settlement contains various recordkeeping requirements to assist the FTC in monitoring the defendant’s compliance with the settlement.
The FTC staff received tremendous assistance in this case from the U.S. Postal Inspection Service and the Columbia, South Carolina’s U.S. Attorney’s Office. Richmond currently is serving 27 months in jail for wire and mail fraud.
The Commission vote authorizing staff to file the proposed stipulated permanent injunction and final order was 5-0. The settlement was filed in the U.S. District Court for the District of South Carolina, and the judge approved the settlement on July 18, 2003.
NOTE: This stipulated permanent injunction and final order is for settlement purposes only and does not constitute an admission by the defendants of a law violation. Stipulated permanent injunction and final order have the force of law when signed by the judge.
Copies of the stipulated permanent injunction and final order will be available soon 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 complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
(FTC File No. X030026; Civil Action No. 3:02-3979-22)
Office of Public Affairs
Valerie M. Verduce or Andrea Foster
FTC Southeast Region