At the request of the Federal Trade Commission, a federal district court in Illinois has entered final orders against three people based in Canada who allegedly defrauded U.S. consumers out of more than $9 million through the sale of phony advance-fee credit cards. The orders bar the defendants from engaging in similar illegal conduct in the future, as well as from calling consumers whose phone numbers are on the National Do Not Call Registry for telemarketers.
The court orders announced today settle the Commission’s charges against Sean Soma, Antonio Marchese, and Sylvain Cholette, all of whom were involved in a scheme that did business as Centurion Financial Benefits. Litigation continues against several other defendants.
The FTC’s Complaint: According to the FTC’s complaint, filed in September 2005, since at least 2004, the defendants used outbound telemarketing to contact consumers in the United States, falsely offering major credit cards, such as MasterCard and Visa, to people who agreed to have the defendants electronically debit their bank accounts for an advance fee of $249. The defendants typically claimed that the credit cards would have a $2,000 credit limit, zero percent interest, and no annual fees, and often targeted their offers at consumers with poor credit histories. Consumers who provided their bank account information did not receive a major credit card, but instead were sent an application for either a “stored value card” or “cash card” that had no line of credit associated with it and could be used only if the consumer first loaded funds onto the card. The complaint also alleged that the defendants violated the law by calling consumers on the FTC’s National Do Not Call Registry.
The complaint named the following entities as defendants, both individually and as corporate officers: Sean Somma aka Sean Soma, individually and as an officer of corporate defendants Centurion Financial Benefits LLC and 1629936 Ontario Ltd, also dba Spectra Financial Benefits; Antonio Marchese aka Tony Marchese, individually and as an officer of corporate defendant 1644738 Ontario Ltd., also dba Sureway Beneficial, Simple Choice Benefits, and Oxford Financial Benefits; Tony Andreopoulos, individually and as an officer of corporate defendants American Getaway Vacations Inc., Credence Travel Processing Inc., and Topstar Media Inc., also dba Integra Financial Benefits; and Dennis Andreopoulos, individually and as an officer of corporate defendants American Getaway Vacations Inc. and Topstar Media Inc., also dba Integra Financial Benefits.
The complaint also charged the following corporations: Centurion Financial Benefits LLC; 1629936 Ontario Ltd., also dba Centurion Financial Benefits; 1644738 Ontario Ltd, dba Integra Financial Benefits; American Getaway Vacations Inc., also dba Integra Financial Benefits; Credence Travel Processing Inc., dba Integra Financial Benefits; and Topstar Media Inc., also dba Integra Financial Benefits. The FTC filed an amended complaint in December 2006, adding several corporate and individual defendants. Litigation continues against all defendants other than Somma, Cholette, Marchese, and Dennis Andreopoulos, whom the Commission voluntarily dismissed as a defendant.
The Stipulated Final Orders: The court orders announced today against defendants Soma, Cholette, and Marchese include strong injunctive relief that will help ensure that they do not engage in similar illegal conduct in the future. Specifically, the orders prohibit the defendants from making misrepresentations regarding credit cards or any other product, program, or service offered to consumers. They prohibit the defendants from violating the Do Not Call provisions of the Telemarketing Sales Rule and from selling, leasing, or transferring the information in their customer lists to anyone. In addition, the orders subject them to strict monitoring and compliance requirements.
Finally, the orders contain an avalanche clause that would require the defendants to pay more than $9.8 million, the total amount of consumer injury caused by the scam, if they are found to have misrepresented their financial condition. The orders also require them to cooperate with the FTC in its ongoing litigation against the remaining Centurion defendants.
Law Enforcement Assistance: The FTC appreciates the considerable assistance of several U.S. and Canadian law enforcement partners, including the Toronto Strategic Partnership, in conducting this investigation. In addition to the FTC, the Toronto Partnership is composed of the U.S. Postal Inspection Service, Canada’s Competition Bureau, the Toronto Police Service Fraud Squad’s Telemarketing Section, the Ontario Provincial Police Anti-Rackets Section, the Ontario Ministry of Government Services, the Royal Canadian Mounted Police, and the United Kingdom’s Office of Fair Trading.
Assistance also was provided by the Alberta Partnership Against Cross-Border Fraud. The Alberta Partnership consists of the FTC, Alberta Government Services, the Calgary Police Service, Canada’s Competition Bureau, the Edmonton Police Service, the Royal Canadian Mounted Police, and the U.S. Postal Inspection Service. The FTC alleged that part of the Centurion telemarketing took place from Calgary, Alberta.
Shortly after the Commission filed its complaint in September 2005, Canadian authorities executed search warrants on the telemarketing boiler rooms in Toronto and Calgary used to perpetrate the scam and brought criminal charges against the scam’s principals. See http://www.competitionbureau.gc.ca/internet/index.cfm?itemID=1949&lg=e and http://www.gov.calgary.ab.ca/citybeat/public/2005/09/release.20050927_141328_9398_0. The Commission vote approving issuance of the stipulated final orders for permanent injunction and final judgments was 5-0. They were filed in the U.S. District Court for the Northern District of Illinois, Eastern Division, on April 25, 2007 and entered by the Court on April 27, 2007.
Copies of the stipulated orders for permanent injunction 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 more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad.
(FTC File No. X050071; Civ. No. 05 C 5442)