Consumer Protection Mission
Permanent Injunctions
< Back | Table of Contents | Next >
Title1 |
Number |
Action Date |
Type of Matter |
Product/Service |
| Ad-Com International, Inc. | X960041 | 10/01/96 | Franchise Rule,
900-Number Rule |
900-Number Business Venture |
| Alliance Communications, Inc. | X960124 | 11/06/96 | Investment Fraud | Mobile Radio and Paging License Services |
| Carousel of Toys USA, Inc. | X970070 | 9/29/97 | Franchise Rule | Display Rack Business Opportunity |
| Commercial Electrical Supply, Inc. | X960097 | 11/22/96 | Telemarketing Sales Rule | Office Supplies |
| (Dean Thomas Corporation, Inc., The) | X970045 X970045 |
9/16/97 9/16/97 |
Deceptive Billing | Advertisements in Charitable Publications |
| Delta Distributors Company, Inc. | X950102 | 11/17/96 | Franchise Rule | Pay Telephone Business Opportunity |
| (Direct Link, Inc.) | X960065 | 11/07/96 | Job Placement Fraud | Employment Services |
| (Fortuna Alliance, LLC) | X960059 | 2/24/97 | Investment Fraud | Internet Pyramid Scheme |
| (Genesis One Corporation, d/b/a Bureau One) | X960038 | 11/19/96 | Franchise Rule | 900-Number Business Venture |
| Georgia International Export Co., Inc., Andrew Gilmore | X970008 X970008 X970008 X970008 X970008 |
8/06/97 8/06/97 8/06/97 8/06/97 8/06/97 |
Franchise Rule | Vending Machine Business Opportunity |
| Ideal Concepts, Inc. | X960002 | 2/10/97 | Telemarketing Fraud | Prize Promotion |
| (Ideal Credit Referral Services Ltd.) | X960063 | 4/24/97 | Telemarketing Sales Rule; Advance-Fee Loan Fraud | Consumer Finance Loans |
| (Intelinet Data Services) | X960067 X960067 X960067 |
10/21/96 4/18/97 4/18/97 |
Job Placement Fraud | Employment Services |
| International Champions, Inc. | X950086 | 3/11/97 | Franchise Rule | Video Game Business Opportunity |
| InVisions International Corporation | X970027 | 11/07/96 | Misrepresented and Deceptive Claims in Infomercials | Toupees |
| J.P. Meyers Company, Inc. | X960045 | 10/01/96 | Franchise Rule | 900-Number Business Venture |
| (Linc II, Inc.) | X960083 | 12/25/96 | Job Placement Fraud | Employment Services |
| Majors Medical Supply, Inc. | X970007 | 9/29/97 | Franchise Rule | Medical Equipment Business Opportunity |
| Marketing Response Group, Inc. | X960036 | 1/15/97 | Direct Mail Fraud | Direct Mail Promotions for Telemarketers |
| Mauney Hosiery Mills, Inc. | X970036 | 4/09/97 | Textile Fiber Products Identification Act | Socks |
| (Meridian Capital Management, Inc.) | X950060 | 11/21/96 | Telemarketing Fraud | Investment Scheme "Recovery Room" |
| (Metro Data, Inc.) | X960112 | 12/11/96 | Job Placement Fraud | Employment Services |
| Mortgage Service Associates, Inc. | X950049 | 1/02/97 | Franchise Rule | Property Inspection Service Franchises |
| (National Credit Foundation, Inc.) | X970005 X970005 X970005 X970005 |
10/20/96 2/14/97 10/18/96 4/10/97 |
Fair Credit Reporting Act | Credit Repair |
| National Invention Services, Inc. | X970063 | 8/15/97 | Patent Fraud | Invention Promotion Services |
| (Oasis Southwest, Inc.) | X960079 | 6/06/97 | Telemarketing Sales Rule | Prize Promotion - "Say No to Drugs" Materials |
| (Omega Promotions, Inc.) | X960118 X960118 X960118 X960118 |
4/14/97 4/04/97 4/04/97 4/04/97 |
Job Placement Fraud | Employment Services |
| (Retail Sales & Marketing) | X970003 X970003 |
8/08/97 7/22/97 |
Franchise Rule | Directory Board Advertising Business Opportunity |
| Telecommunications Protection Agency, Inc. | X960085 | 12/03/96 | Telemarketing Sales Rule | Prize-Promotion "Recovery Room" |
1A company name shown in parentheses is for identification of the case only. The company is not a defendant in the item shown in the table.
Ad-Com International, Inc.; Anthony Catalano; Lorraine Corrales
The Commission reached a settlement with Ad-Com and its officers in connection with their sale of business opportunities consisting of 900-number lines that offer entertainment programs. The defendants allegedly violated the Franchise Rule, which requires franchisors to give potential buyers important information about the business venture offered. They also allegedly violated the 900-Number Rule by using "collect callback," whereby a caller telephones a toll-free 800-number and receives in return a collect call with the entertainment program. The order prohibits the defendants from misrepresenting the sales, income, or profits of franchisees; requires them to comply with the Franchise Rule; and bars them from violating the 900-Number Rule.
Alliance Communications, Inc.; Oliver Porter
Alliance and its president settled allegations in connection with their application preparation services for specialized mobile radio and paging licenses issued by the Federal Communications Commission (FCC). The defendants allegedly misrepresented that consumers would receive FCC licenses through their services and misrepresented the investment value of the licenses. The order permanently bars the defendants from the marketing of application preparation services and from falsely representing the profit or risk of any investment in the future.
Carousel of Toys USA, Inc.; Kelie Brodzinski
Carousel of Toys is out of business, and the company director has agreed not to front for any fraudulent franchisor in the future, following the resolution of allegations against them. The Commission alleged that the defendants used deceptive and false claims to sell their business opportunity, which consisted of display racks featuring Disney and other trade-named toys and products to be placed in retail locations. The settlement prohibits the defendants from misrepresenting the income or profits of any franchise or business opportunity they sell; failing to disclose all the costs and fees dealers must pay in order to begin operating the business, including an itemized list of inventory, and the dealer cost and a suggested retail price for each item; violating the Franchise Rule; and assisting anyone who misrepresents a franchise or business opportunity or violates the Rule.
Commercial Electrical Supply, Inc.; Michael C. Spence
Commercial Electrical and its owner agreed to settle allegations that they used a variety of deceptive practices in their telemarketing operation to get orders for business supplies. The Commission alleged that the company misrepresented its products, sent merchandise that was unordered, charged inflated prices, and added unauthorized fees. The order prohibits the defendants from the business practices cited, requires them to comply with the Telemarketing Sales Rule, and requires Michael Spence to obtain a $100,000 performance bond before engaging in future telemarketing.
(Dean Thomas Corporation, Inc.,The)
Raymond Celie;
Randy B. Lonis
Two former managers of a publishing company agreed to settle allegations that they misrepresented how and where their publications were distributed and attempted to collect money for unordered advertising. The Commission alleged that the defendants misrepresented that the advertising proceeds would support a local civic purpose and that businesses had previously authorized advertising and were obligated to pay for it. Under separate but identical settlements, Raymond Celie and Randy Lonis are prohibited from making false or misleading representations in connection with the sale of any advertisement, publication, or program in the future. Each is required to post a $500,000 bond before entering the business of selling advertisements.
Delta Distributors Company, Inc.; Steven Harding
The Commission reached a settlement with Delta Distributors and its president, settling allegations in connection with their sale of business opportunities involving countertop pay telephones. The defendants allegedly made unsubstantiated earnings claims and failed to provide critical pre-purchase information to potential buyers, in violation of the Franchise Rule. The order permanently bars the defendants from future violations of the Rule.
(Direct Link, Inc.)
Suzanne Bannister
A federal district court has permanently barred Suzanne Bannister from misrepresenting that the services of her employment firm will lead to jobs in specific fields or geographic areas. In addition, she must post a $50,000 performance bond before marketing employment-related services for the next 10 years. The order follows Commission allegations that the defendant charged consumers upfront fees for access to "guaranteed" jobs, but few, if any, of her clients obtained jobs in their chosen fields or geographic areas.
(Fortuna Alliance, LLC)
Monique Delgado
The Commission reached a settlement with Monique Delgado in connection with her role in an allegedly illegal pyramid scheme on the Internet. The Commission alleged that Fortuna and its officers induced thousands of consumers around the world to join the pyramid scheme, promising thousands of dollars in "profits" as other people "enrolled" in the program. The order permanently bars Delgado from participating in any chain or pyramid program and from making deceptive claims in connection with any marketing or investment program she offers. (Also see Fortuna Alliance, LLC, page 122.)
(Genesis One Corporation, d/b/a Bureau One)
Rose Kistorian (a/k/a Vartouhi Kistorian)
The Commission reached a settlement with Rose Kistorian, president of Genesis One, in connection with allegations that she made false earnings claims and other misrepresentations in marketing 900-number business ventures. The defendant also allegedly violated the Franchise Rule by failing to give investors required pre-purchase information. The order bars Kistorian from misrepresenting income and other information concerning any franchise or business opportunity and from violating the Rule in the future. (Also see Genesis One Corporation, page 122.)
Georgia International Export Co., Inc. (d/b/a Creative Technologies International);
L&S Manufacturing, Inc.; Steven Axelrod; Arnold Filner; Andrew Gilmore; Wayne Gregory
The defendants in a lawsuit that alleged that they deceptively sold business opportunities for vending machines agreed to settle the allegations under orders that would bar them permanently from selling franchises and business opportunities. The Commission alleged that the defendants misrepresented the earnings potential of the vending machines, which dispensed single-use disposable cameras; used phony references; misrepresented the ability of locating firms to find profitable sites for the machines; and falsely stated that Creative Technologies was in partnership with Eastman Kodak Company. The five settlements ban the defendants from franchise or business opportunity sales for life.
Ideal Concepts, Inc.
Ideal Concepts is banned from future telemarketing under an agreement settling allegations that the company's telemarketers promised consumers, primarily senior citizens, valuable prizes or awards that were never delivered or, if delivered, were worth a fraction of their claimed value. The prizes were offered as an inducement for consumers to purchase a variety of products costing from $400 to over $1,000. A separate settlement requires the company president to pay consumer redress (see Ideal Concepts, Inc., page 123.)
(Ideal Credit Referral Services Ltd.)
David Wayne Panella (d/b/a Consolidated Financial Services or Gateway Service Center)
David Panella, a loan broker, agreed to settle allegations in connection with his role in a scheme that charged consumers advance fees for loans they never received. According to the Commission, Panella operated a U.S.-based "turn-down" room, sending out denial letters to loan applicants who had answered ads and paid an upfront fee. The other six corporate and seven individual defendants in the case were based in Canada, but targeted U.S. consumers. The settlement bars Panella from knowingly providing assistance or support to any telemarketers employing unfair or deceptive practices to sell credit-related services and from violating the Telemarketing Sales Rule. A number of the defendants in this case were required to pay consumer redress (see Ideal Credit Referral Services Ltd., page 124).
(Intelinet Data Services)
Patrick Donaghy; Thomas F. Frontera; Robin L. Murphy
In separate settlements, three officers of a firm that marketed job search services agreed to settle allegations that they participated in a fraudulent telemarketing scheme. Stratified Advertising and Marketing, Inc., doing business as Intelinet, allegedly misrepresented the availability of government jobs in consumers' chosen fields and locations, and misrepresented the ease of obtaining a refund of the advance fees it charged, if a consumer failed to find a job. The three orders prohibit the defendants from making such misrepresentations in the future and from engaging in any telemarketing activities for 10 years unless each first posts a $100,000 performance bond. (Also see Intelinet Data Services, page 125.)
International Champions, Inc.; Wayne B. Hunt
The Commission reached a settlement with International Champions and its president, settling allegations in connection with their sale of business opportunities involving countertop video games. The defendants allegedly made unsubstantiated earnings claims and failed to provide critical pre-purchase information to potential buyers, in violation of the Franchise Rule. The order permanently bars the defendants from future violations of the Rule.
InVisions International Corporation; Stephen C. Fox
InVisions and its president agreed to settle allegations that the company was selling nothing but toupees when advertising its painless, nonsurgical "procedure" or "process" as a maintenance-free, permanent solution to hair loss. The Commission also alleged that the company misrepresented consumer endorsements used in its infomercials and misled consumers as to its refund policy. The order prohibits the defendants from claiming that the InVisions Process is not a hairpiece, wig, or toupee, and from misrepresenting endorsements, testimonials, or refund policies.
J.P. Meyers Company, Inc.; Joseph Shapiro
The Commission reached a settlement with J.P. Meyers and its corporate officer in connection with their sale of business opportunities consisting of 900-number lines that offer entertainment programs. The defendants were alleged to have violated the Franchise Rule, which requires franchisors to give potential buyers important information about the business venture offered. The order prohibits the defendants from misrepresenting the sales, income, or profits of franchisees in the future and requires them to comply with the Rule.
(Linc II, Inc.)
Joel Ancelowitz (a/k/a Jim Manti)
Joel Ancelowitz, a telemarketer who sold employment services for Linc II, agreed to settle allegations regarding his role in an allegedly fraudulent job search service. According to the Commission, the company claimed that it had access to specific jobs and charged consumers upfront fees for its services, but did not provide clients with jobs or even job interviews in many cases. The order bars Ancelowitz from engaging in telemarketing in any form or in the activities of a job placement agency and from assisting others in either of these activities. (Also see Linc II, Inc., page 126.)
Majors Medical Supply, Inc.; Joanne Phillips; Stuart Phillips
Majors Medical and its two corporate officers agreed to settle Commission allegations that they made false claims about the income franchisees could make and the startup costs of investing in their medical equipment business ventures. The franchises involved the sale and rental of durable medical equipment such as wheel chairs. The settlement provides for the liquidation of corporate assets; requires the individual defendants, for five years, to post a $1 million bond each before involving themselves in the sale of any franchise or business opportunity; and prohibits them from misrepresenting the likely income, profits, or sales of any product or service they offer in the future.
Marketing Response Group, Inc.; Marketing Response Group and Laser Company, Inc.;
Palm Harbor Holdings, Inc.; Pete-Nik Holdings, Inc.; Service Bureau International, Inc.;
William S. Kilichowski; Peter J. Porcelli, Jr.
Marketing Response, a mailing house, and related defendants agreed to settle allegations that they assisted fraudulent telemarketers by sending out mail promotions that falsely promised quick land sales, guaranteed awards, and free vacations. The order bars the two individuals and the five companies they operate from sending out misleading promotional materials and requires them to monitor the business activities of future telemarketing clients for deception. It also bars the defendants from violating, or assisting others in violating, the Telemarketing Sales Rule.
Mauney Hosiery Mills, Inc.
Mauney agreed to settle allegations that the company violated the Textile Fiber Products Identification Act when it sold a mislabeled line of socks to a national retailer, The Gap. According to the Commission, labels on the Granite Ragg socks indicated that the socks contained more cotton, nylon, polyester, acrylic, and Lycra spandex fiber than they actually did. In addition, the company allegedly furnished false guaranties that its socks were not misbranded under the Act. The consent order prohibits the company from violating the Act in the future.
(Meridian Capital Management, Inc.)
Richard Randall
Richard Randall settled allegations stemming from his role in an allegedly deceptive scheme in which telemarketers called victims of previous telemarketing fraud - often involving investments in wireless telecommunications licenses - and falsely represented that, for a fee, they could recover the money the consumers had previously lost. The order bars Randall from misrepresenting any material aspect of future telemarketing or recovery room services and from violating the Telemarketing Sales Rule. He is required to post a $200,000 performance bond before participating in future telemarketing activities. (Also see Meridian Capital Management, Inc., pages 128 and 141.)
(Metro Data, Inc.)
Katherine M. Howard (a/k/a Cassandra Stone)
Katherine Howard settled allegations stemming from her position as a sales representative for Metro Data, a telemarketing operation that ran an allegedly fraudulent employment service. According to the Commission, contrary to what the company told consumers, it had no relationships with prospective employers, it cashed checks and charged accounts immediately, it refused to cancel memberships, and it denied requests for refunds. The order permanently bars Howard from the job placement business.
Mortgage Service Associates, Inc.; J.D. Raffone Associates, Inc.; MSA Nationwide
Field Services, Inc.; Joseph D. Raffone; Vita L. Raffone
Two individuals and the companies through which they did business agreed to settle allegations that they made false claims in selling franchises for property inspection services. The Commission alleged that the defendants violated the Franchise Rule by misrepresenting earnings and by not providing required disclosure documents to potential franchisees. The order prohibits such misrepresentations in the future, requires all of the defendants to comply with the Rule, and requires each of the individuals to post a $300,000 performance bond before becoming involved, over the next three years, in a business that sells franchises or business opportunities.
(National Credit Foundation, Inc.)
NCF Corporation; Brian W. Cutright; Mark F. Guimond; Hal Z. Lederman; Robert J. Maynard, Jr.
In four agreements, one corporate defendant and four individuals settled allegations in connection with their roles in a now-defunct credit repair business. According to the Commission, National Credit misrepresented its ability to improve consumers' credit histories by permanently removing negative but accurate information from credit reports. Company officers Brian Cutright and Robert Maynard also allegedly misrepresented the company's purpose in obtaining consumers' bank account numbers and debited the accounts without authorization. The Commission alleged that Maynard, NCF, and NCF owner Hal Lederman produced and disseminated an infomercial about National Credit's services that misrepresented that the program was an independent television program and not a paid advertisement. The four orders prohibit NCF and Lederman, Cutright, Guimond, and Maynard from making the misrepresentations alleged in the complaint, including misrepresenting any right or remedy under the Fair Credit Reporting Act. In addition, Lederman and Maynard are permanently banned from engaging in any business or activity relating to credit repair services.
National Invention Services, Inc.,; John F. Lee
National Invention Services and its president/CEO were required by court order to disclose that none of the nearly 1,000 clients who signed up for their invention promotion services has made more money from their inventions that they paid the firm to patent and promote them. The disclosure requirement is included in preliminary orders issued by a federal district court following Commission allegations that the defendants deceptively marketed their services. Phase 1 of the services included a research report and preliminary patent search, and phase 2 included patent and promotion services that cost inventors thousands of dollars. The preliminary orders also prohibit the defendants from falsely representing any material aspect of their research, patent, marketing, or invention promotion services. The orders were in effect pending the outcome of a trial on the Commission allegations.
(Oasis Southwest, Inc.)
Ray Jojola
Ray Jojola, one of the principals of Oasis, agreed to settle allegations concerning his role in a fraudulent prize-promotion scheme primarily targeting senior citizens. According to the Commission, the company allegedly promised consumers valuable prizes if they purchased "Say No to Drugs" items, but the prizes consumers received, if any, were not worth more than they paid. In addition, the company allegedly failed to disclose that no purchase was necessary to win a prize, in violation of the Telemarketing Sales Rule. The order permanently bans Jojola from engaging in any telephone prize promotion or recovery room service and prohibits him from future violations of the Rule. A separate settlement was made with the company and another of its officers (see Oasis Southwest, Inc., page 130).
(Omega Promotions, Inc.) Regency Services, Inc.; Lisa Warnock Grant (a/k/a Lisa Phillips); Richard Devon Grant;
Michael Warnock
A settlement agreement bans three individuals who allegedly ran a bogus employment services scheme from ever again engaging in telemarketing or the activities of a job placement agency. The settlement resolves allegations that the defendants, who owned and operated Regency Services and Omega Promotions, ran telemarketing operations pitching openings for such positions as cruise ship tour guides, electronic specialists, and chemical engineers. They allegedly promised to arrange interviews and induced consumers to divulge their checking account numbers, then debited the accounts without providing any services. The three defendants pled guilty to criminal charges brought by the Department of Justice and were sentenced to prison terms. An order against Omega Promotions calls for payment of consumer redress (see Omega Promotions, Inc., page 130).
(Retail Sales & Marketing)
Ann Fox; Allan O'Hearn
Two defendants agreed to settle allegations concerning their roles in marketing a business opportunity that involved the sale of advertising on directory boards placed in hotel lobbies. The Commission alleged that the defendants made false earnings claims and false representations about the location assistance that would be provided to purchasers of the business opportunities. Under the two settlements, Ann Fox and Allan O'Hearn are prohibited from engaging in similar deceptive practices and from violating the Franchise Rule in the future. (Also see Retail Sales & Marketing, page 133).
Telecommunications Protection Agency, Inc.; Charles Fulton; Jennifer Fulton
A telemarketing "recovery room" operation and its principals agreed to settle allegations that they falsely claimed they would recover a substantial portion of the money that consumers had previously lost to fraudulent telemarketers. According to the Commission, Telecommunications Protection charged an upfront fee for its services but, in most if not all instances, did not recover any money for its customers. The order prohibits the defendants from making misrepresentations about their recovery services and from future violations of the Telemarketing Sales Rule. As a result of the Commission's action, the company ceased all business operations.
< Back | Table of Contents | Next >