The Federal Trade Commission has filed in federal district court settlement agreements that would ban three Florida individuals who allegedly ran a bogus employment services scheme from ever again engaging in another telemarketing operation or the activities of a job placement agency, or assisting others in such businesses. The settlements would resolve FTC charges that the defendants, who owned and operated Regency Services, Inc. and Omega Promotions, Inc., ran multiple, successive telemarketing operations pitching openings for such positions as cruise ship tour guides, electronic specialists and chemical engineers. The defendants allegedly promised to arrange interviews, and induced consumers to divulge their checking account numbers based on promises that the accounts would not be debited before the interviews were arranged. The FTC alleged that the defendants invariably debited consumers’ checking accounts for as much as $399 without their authorization, and provided consumers with no services at all. Each settlement also includes a provision to require the defendants to have consumers’ signatures or express prior written authorization before debiting their checking accounts in the future.
Regency and Omega failed to answer the complaint filed by the FTC or to enter into a settlement, and the Commission has asked the court to enter a default judgment against them.
The FTC filed charges in the Regency/Omega case in June 1996 as part of Project Career Sweep, a law-enforcement crackdown targeting fraudulent employment agencies. The individual defendants are Richard Devon Grant, Michael Warnock and Lisa Warnock Grant. Regency is based in Winter Park, Florida; Omega’s last known address was in Maitland, Florida; and the individuals all live in central Florida.
As part of Project Career Sweep, the FTC cautioned consumers that, many times, there are no real jobs behind classified ads they see in newspapers. The fraudulent marketing of employ ment services starts with the placement of such ads touting a variety of positions and listing a phone number. When consumers call, telemarketers hype themselves as job placement services with special access to specific openings, but few consumers ever receive the placement assistance promised by these telemarketers and most never see their money again. The red flag, the FTC said, is a request for up-front fees simply for interviews or placement, and suggested that consumers check the contract carefully to be certain that any written refund policy matches what they’ve been told by a telemarketer. An FTC brochure titled "Help Wanted . . . Finding a Job" offering additional tips is available on the FTC’s web site at www.ftc.gov and also from the agency’s Public Reference Branch (see address below).
In the Regency/Omega case, the FTC immediately won a temporary restraining order halting the challenged scheme and freezing the defendants’ assets. Shortly thereafter, the three individuals were indicted by a federal grand jury in Orlando, and arrested and charged with 54 counts of fraud and money laundering (this criminal action was in addition to the FTC civil action). All three pled guilty and were sentenced on Feb. 24, 1997. Richard Grant received a prison sentence of 70 months; Michael Warnock was sentenced to 33 months, and Lisa Warnock Grant was sentenced to 27 months.
The FTC settlements also call for payment of $236,835 for consumer redress, but the FTC said it is unclear at this time how much of that money can be collected.
The Commission vote to file the proposed settlements, which are stipulated final judgments, was 5-0. They were filed Feb. 28 in U.S. District Court for the Middle District of Florida, Orlando Division, and require the court’s approval to become binding.
NOTE: These consent judgments are for settlement purposes only and do not constitute admissions by the defendants of law violations. Consent judgments have the force of law when signed by the judge.
Copies of the consent judgments and other FTC materials are available from the FTC’s web site at http://www.ftc.gov and also from its Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
(FTC File No. X960118)
(Civil Action No. 96-643-CIV-ORL-22)