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The Federal Trade Commission has charged the marketer of a work-at-home business opportunity with violating federal law by falsely promising Spanish-speaking consumers substantial income for stuffing envelopes. The Commission seeks to prevent further violations and to obtain redress for affected consumers. In another matter, the remaining defendants in a similar scam have agreed to settle FTC charges for allegedly misleading consumers.

According to the FTC’s complaint in the first case, the defendant marketed a fraudulent envelope-stuffing scheme to consumers throughout the nation, including Puerto Rico, via classified ads in Spanish-language newspapers and on a Web site available in Spanish and English. A typical print ad, translated from Spanish, stated that consumers could earn up to $1,500 and directed consumers to the Web site.

Statements on the Web site included, “Would you stuff 80 envelopes to earn $1,400 per week?” and “Your pay IS GUARANTEED in advance for the envelopes you stuff.” The Web site claimed that the defendant would pay consumers from $17.50 to $28 for each envelope stuffed, depending upon the number of envelopes they stuffed and how long they participated. It also represented that, for a “deposit” of $37, with no additional fees, the defendant would provide all materials consumers needed to earn money, including “the envelopes, which will be stamped and addressed.”

After consumers paid the $37 fee, however, the defendant allegedly did not send consumers the promised stamped and addressed envelopes. Instead, he sent them an English-language “Incredible Home Mailing Program” sales pamphlet. This pamphlet revealed for the first time that the defendant would not pay consumers for stuffing envelopes as he had claimed. Instead, the pamphlet instructed consumers to publish their own ads, at their own expense, to sell the same pamphlet to other consumers. The defendant, therefore, provided consumers with instructions on how to deceive others.

Zoilo Cruz, also known as Zoilo Cruz Carrion, located in Puerto Rico and doing business as International Marketing, is charged with violating the FTC Act by:

  • falsely stating that consumers are likely to earn a substantial amount of money, that International Marketing will pay consumers for each envelope stuffed, that it will provide all materials needed, and that, after paying $37, consumers will not incur additional charges before earning money; and
  • furnishing consumers with an instructions pamphlet that contains false and misleading representations that provided others with the means to commit deceptive acts or practices.

The Commission vote to authorize staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the District of Puerto Rico.

In the second case, Min Sung Kim and Integrity Marketing Team, Inc., operating in Florida as “Home Business System,” placed classified ads throughout the nation, including in Spanish-language newspapers. They claimed that participants would earn at least $17.50 per stuffed envelope and guaranteed a weekly income of up to $1,400. Most consumers who paid a $45 “registration deposit” never heard from the company again.

A federal district court judge halted the operation in August 2007 and ordered a freeze of the defendants’ assets. Co-defendant Byron Peterson settled the charges against him in April 2008.

Under the settlement announced today, the defendants are barred from misrepresenting that consumers are likely to earn a substantial amount of money, the amount of sales or earnings the consumers are likely to achieve, and the amount of sales or earnings that others have achieved in the past in any work-at-home opportunity or sale of any good or service. The defendants are also barred from misrepresenting that participants will be paid for each envelope they stuff, the nature of any business venture offered or sold, and any material term, condition, or limitation of a transaction or about the use of any offered good or service. In addition, they are barred from selling, renting, or otherwise disclosing personal information about anyone who paid money to the defendants before the order is entered.

The settlement includes a $1,280,612 judgment, which is suspended upon payment of $114,708. The full judgment will be imposed if the defendants are found to have misrepresented their financial condition. The settlement also contains standard record-keeping provisions to allow the FTC to monitor compliance with its order.

The Commission vote to authorize Commission staff to file the stipulated final order was 4-0. It was filed in the U.S. District Court for the Southern District of Florida.

NOTE in Zoilo Cruz d/b/a International Marketing: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.

NOTE in Home Business System: This stipulated final order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC's Web site provides free information on a variety of consumer topics.

(FTC File No. 0823169 and X070041)

Contact Information

Frank Dorman
Office of Public Affairs
International Marketing:
Edwin Rodriguez
Bureau of Consumer Protection

Malini Mithal
Bureau of Consumer Protection

Home Business System:
Paul K. Davis
FTCs Southeast Region