An international telemarketing network will continue to be barred from illegally marketing advance-fee credit card packages under a preliminary injunction entered by the U.S. District Court in Waco, Texas. The Federal Trade Commission has alleged that the network enabled fraudulent sellers in the United States to hide behind bogus Canadian front men as they telemarketed illegally through boiler rooms running from the Caribbean, United States, Canada and India. The order continues safeguards imposed by the court in an earlier temporary restraining order, and also extends the court-appointed receiver's control over certain corporate defendants to include the personal assets of Kyle Kimoto, president of Assail, Inc. and an alleged leader of the scheme.
Numerous law enforcement agencies and private organizations provided substantial assistance that enabled the FTC to unravel this complex telemarketing network. Among these groups special credit must be given to the Better Business Bureaus of Reno, Nevada; Idaho Falls, Idaho; and Southeast Florida. All three BBB's provided the FTC with information about the hundreds of complaints they received after the defendants opened mail drops in their locations that pretended to be the sellers' places of business. Officials of the Consumer Services Investigation Division in British Columbia, Canada; the Florida Department of Banking and Finance; and the Attorney General's offices of Iowa, Idaho, and Nevada also helped to reveal the falsity of these alleged Florida, Idaho, and Nevada businesses. In fact, the FTC has alleged that the sellers, and their Canadian officers, were elaborate "fronts," created by defendant Assail, Inc. to hide the fraud. Officials of MasterCard International, Dun & Bradstreet, and other businesses also provided valuable information to support the FTC's allegations that the defendants' claimed connections to legitimate businesses were false.
The court entered three preliminary injunctions - the result of one group of defendants contesting the FTC's allegations, while two groups agreed to the entry of separate orders. The court entered a litigated preliminary injunction order against the first group of defendants: Assail, Inc., headquartered in St. George, Utah, its president, Kyle Kimoto, and two of its officers, Cliff Dunn and Mike Henriksen; Summit Communications International, Inc., purportedly headquartered in Carson City, Nevada, and doing business as Advantage Capital, and its president, Matthew Ho; Capital First Benefits, Inc., purportedly headquartered in Miami, Florida, and its president, Ben Lee; and Premier One Benefits, Inc., purportedly based in Idaho Falls, Idaho, and its president, Johnson Salanga. The order freezes the assets of all defendants and places the assets of the corporations and the personal assets of Kyle Kimoto under the control of Robb Evans and Associates, the court-appointed receiver.
The other two groups of defendants agreed to the entry of stipulated preliminary injunctions. The first order against Infinium, Inc., and Market-Reps.com, Inc., headquartered in Cedar City, Utah, and their president Brian Schofield, freezes the defendants' assets and places the receiver in control of the corporate assets. The second order, against Specialty Outsourcing Solutions, Inc., headquartered in Waco, Texas, and its officers, Jay Lankford and Lee Murphy freezes the assets of the defendants, but does not place the defendants into receivership.
The preliminary injunctions were issued on February 4, 2003 by the U.S. District Court, Western District of Texas, Waco Division.
Copies of the three preliminary injunction orders 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, 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
James Kohm or Lawrence Hodapp
Bureau of Consumer Protection
202-326-2640 or 202-326-3105
(FTC File No. 022-3147)
(Civil Action No. W03CA007)