Other Shoe Drops on Canadian Advance-Fee Credit Card Fraudsters

For Release

Final Court Judgments Close Case Against Remaining ‘Prime One’ Defendants

At the request of the Federal Trade Commission, a federal district court in Illinois has entered an order for permanent injunction, final judgment, and final default judgment against several Canadian cross-border fraudsters, permanently banning their deceptive telemarketing pitches and requiring them to pay $8.1 million, the total amount gained from their sale of non-existent advance-fee Visa and MasterCard credit cards to U.S. consumers.

The FTC brought the case in November 2004 as part of a major multi-jurisdictional cross-border fraud law enforcement initiative. Two defendants, Mishele Wells and her company Simax Corp., settled the Commission’s charges in April 2006. The action announced today ends the FTC’s litigation against the remaining defendants: Paul Price and Elissa R. Price, individually, and corporate entities 120194 Canada, Ltd.; Prime One Financial Group, Inc.; Marketing Directives, Inc.; 1284383 Ontario Inc.; and 1309529 Ontario Inc.

The FTC’s Complaint: Coordinated closely with U.S. and Canadian law enforcers, including members of the Toronto Strategic Partnership, the FTC’s complaint alleged that three individuals and their companies falsely claimed that consumers who paid a fee ranging from $159 to $236 would be guaranteed a low-interest rate, high-credit limit, and no-annual-fee MasterCard or Visa card. The Commission charged that since August 1999, the defendants had operated boiler rooms in Toronto, targeting U.S. consumers with no credit or poor credit histories. After paying for the promised cards, however, consumers did not receive them. Instead, they got packages containing coupons and discounts for travel, recreation, automobile services, medical plans, satellite service, and cellular telephones.

The FTC’s original complaint, filed on November 8, 2004, named 120194 Canada Limited, d/b/a Veritech Communications, Veritech Communication Services, Veritech, Prime One Benefits, Prime One Financial, Prime One, First National Credit Service, and U.S. National Credit; Prime One Financial Group, Inc., d/b/a Prime One Benefits, Prime One Financial, Prime One, First National Credit Service, and U.S. National Credit, Marketing Directives, Inc.

The complaint also alleged that the group of companies was owned and operated by individual defendants Paul Price and Elissa R. Price, a/k/a Lisa Price and Lisa Wells. The U.S. District Court in Chicago entered a temporary restraining order against the defendants on November 8, 2004, and a stipulated preliminary injunction against them on December 10, 2004, halting their cross-border telemarketing activities.

In September 2005, the Commission filed an amended complaint adding four defendants to the case: 1284383 Ontario Inc., d/b/a First National Credit Services and Direct Service Management; 1309529 Ontario Inc., d/b/a U.S. National Credit; Simax Corp., d/b/a America’s Gift House; as well as Mishele Wells, Elissa Price’s sister. On April 10, 2006, the FTC announced the entry of a stipulated final judgment and order, prohibiting Mishele Wells and her company Simax – both of whom allegedly were active participants in the telemarketing scheme – from making misrepresentations about the provision of credit cards, as well as about any product, program, or service offered to consumers. They also had to pay $15,000 in consumer redress. Litigation against Paul and Elissa Price continued, with the FTC subsequently filing a motion for summary judgment against them. That motion was granted, leading to the order for permanent injunction and final judgment announced today. Default judgments also were entered against the remaining corporate defendants.

The New Final Judgment and Default Order: The final judgment and default order announced today against the remaining individual and corporate defendants requires them to pay $8.1 million, the amount of their total net sales through the fraudulent scheme. It also permanently bans them from: 1) telemarketing any products, programs, or services to consumers in the United States; 2) selling credit-related products, programs, or services to consumers in the United States; and 3) making or assisting anyone else in making misrepresentations material to a customer’s decision to buy any good or service, concerning the performance, efficacy, or nature of a product or service, or the material terms, conditions, or limitations of any transaction regarding a product or service. Finally, it continues the freeze in place on the defendants’ assets, except for funds required to pay the $8.1 million to the FTC, prohibits them from disclosing information about their customers, and contains monitoring and record keeping terms to ensure their compliance.

The Toronto Strategic Partnership: The FTC investigated this case with the assistance of members of the Toronto Strategic Partnership, which, in addition to the FTC, includes: the Toronto Police Service Fraud Squad, Telemarketing Section; the Ontario Provincial Police, Anti-Rackets Section; the Ontario Ministry of Government Services; Canada’s Competition Bureau; the Royal Canadian Mounted Police; the United States Postal Inspection Service; and the United Kingdom’s Office of Fair Trading.

The Commission vote approving the order for permanent injunction and final judgment announced today was 5-0. The document was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division, on March 8, 2007. The FTC received substantial assistance in this matter from the U.S. Attorney’s Office for the Southern District of Illinois.

NOTE: Final judgments are for settlement purposes only and do not constitute an admission by the defendant of a law violation. Consent judgments have the force of law when signed by the judge.

Copies of the order for permanent injunction and final judgment against defendants Mishele Wells and Simax Corp. are available 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, DC 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 thousands of civil and criminal law enforcement agencies in the U.S. and abroad.

MEDIA CONTACT:

Mitchell Katz,
Office of Public Affairs
202-326-2161

STAFF CONTACT:

Karen D. Dodge,
FTC Midwest Region
312-960-5608

(FTC File No. X050010; Civ. No. 04C 7204)

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