Bogus Business Opportunity Operators Settle FTC Charges

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Defendants who used false earnings claims, shills, and other misleading representations to sell greeting card business ventures have agreed to settle Federal Trade Commission charges that their operation violated federal laws. The settlements will permanently ban the defendants from participating in the sale of any business venture and require them to give up their ill-gotten gains.

The business opportunity, offered by Universal Greeting Card Corporation and its president, Robert Ruffeino, was targeted as part of "Project Busted Opportunity," a law enforcement sweep targeting fraudulent business opportunity offers announced in June 2002. The FTC used undercover investigators and special computer tools to identify business opportunity advertisements that made earnings claims without including cautionary language required by the FTC's Franchise Rule. The investigators posed as prospective investors and listened to sales pitches from operators who hyped the business opportunity and touted the earnings potential. Then the investigators were given "references" - supposedly successful owners and operators of the business opportunity who could verify the earnings claims. In the course of their investigations, the FTC staff uncovered evidence that some of the "references" didn't own or operate a business. They were shills - actors paid by Universal to pose as successful and prosperous owners. Indeed, one of the "references" was actually a shill for more than one business opportunity targeted in the law enforcement sweep.

On June 12, 2002, the FTC filed a complaint alleging that Universal and Ruffeino falsely claimed purchasers could make substantial income, including minimum weekly or annual income, through the sale or distribution of greeting cards supplied by Universal. According to the FTC, the defendants told consumers that Universal would provide significant assistance to purchasers by securing locations for their card businesses. They offered to supply references who had purchased card businesses from Universal and who could attest to their own success with the business. The FTC charged that the earnings and assistance representations were false and the "references" were merely shills paid to lie to consumers. The FTC alleged that Universal and Ruffeino were violating federal laws, including the Franchise Rule. At the request of the FTC, the court ordered a halt to the business practices, froze the defendants' assets and appointed a receiver to oversee the business assets, pending trial. The settlements announced today end that litigation.

In addition to Universal and Ruffeino, the complaint named Edward Jacobs, a Universal sales representative, and Wayne Hammond, a shill for the business. The business was based in Miami, Florida.

The settlements ban the defendants from participating in the sale of any business venture, or from owning, working for, or assisting any entity that engages in that activity. Universal and Ruffeino will give up $37,000 in ill-gotten gains -- the amount frozen by the court following the FTC complaint. Hammond will turn over $1,000. Based on the financial disclosure statements provided by the defendants, the remainder of the financial judgments were suspended. Should the court find that the defendants' financial statements are inaccurate, the defendants will be liable for a total of up to $1.7 million, the amount of harm to consumers.

The Commission vote to accept the settlement was 5-0.

NOTE:  A stipulated final judgment and order is for settlement purposes only and does not constitute an admission of a law violation.

Copies of the complaint and stipulated final judgments and orders are available from the FTC's Web site at 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 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.

Contact Information

Media Contact:
Claudia Bourne Farrell,
Office of Public Affairs
Staff Contact:
Delores Gardner Thompson or Gary Ivens,
Bureau of Consumer Protection
202-326-2264 or 202-326-2330