Lonny Remmers of Santa Ana, California, has pleaded guilty to criminal contempt charges for violation of a Federal Trade Commission order that required Remmers to obtain a $150,000 performance bond before engaging in telemarketing. Under the terms of the plea agreement, Remmers, who will be sentenced on November 23, may receive a prison term of 41 to 51 months.
"The Remmers case sends the message that violators of FTC orders will be prosecuted," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection. "This case demonstrates that the FTC's "Project Scofflaw" initiative is protecting consumers from fraud by identifying and prosecuting recidivists."
The government's case against Remmers dates back to 1995 when the FTC charged that he violated federal laws in the course of telemarketing bogus investments involving Direct Broadcast Satellite (DBS) television programming. In a May 1995 complaint, the FTC alleged that Remmers through his two companies, PAL Financial Services, Inc. and Media Management, Inc., engaged in fraudulent tactics to pitch consumer investments in a plan to market and distribute DBS television programming in certain areas of Georgia. A federal district court issued a final order against Remmers and PAL Financial Services in January 1996 prohibiting them from misrepresenting the risk and potential profitability of any investments. The order required Remmers to obtain -- for 10 years -- a $150,000 performance bond before engaging in future telemarketing activities.
In filing the criminal contempt charges, the government alleged that between January 19, 1996, and April 30, 1996, Remmers operated a fraudulent investment telemarketing scam under a new name -- Dimension Capital Group (DCG). Through DCG, Remmers offered purported "investments" in promissory notes backed by U.S. Treasury bills and guaranteed to return at least 12 percent annually. In fact, the government charged that there were no Treasury bills to back up the investments and investors who purchased the promissory notes lost all of the $4.5 million in principal they had invested with Remmers.
The U.S. Attorney's Office for the Central District of California, the Department of Justice's Office of Consumer Litigation, and the Federal Bureau of Investigation participated in the prosecution of this case, together with an FTC attorney who was appointed as a Special Assistant U.S. Attorney. Remmers entered his guilty plea in the U.S. District Court for the Central District of California in Santa Ana, on September 14, 1998, and U.S. District Judge Linda H. McLaughlin set a sentencing date of November 23, 1998.
Copies of the court documents and today's news release, as well as other news releases and legal documents filed in the Satellite Broadcasting, Lonny Remmers and PAL Financial Services case are available from the FTC's Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); 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.
(Remmers -- Case No. SACR 98-4-LHM)