More than $200,000 for Consumer Redress, Principal Faces Jail Time for Mail Fraud
A spammer who ran a bogus envelope-stuffing work-at-home scheme, promising “cash for stuffing” but delivering nothing, will pay more than $200,000 for consumer redress and could face nearly five years in prison. A settlement between the Federal Trade Commission, the spammer, and other defendants permanently bans the defendants from engaging in the advertising, promotion, or sale of work-at-home opportunities, and bars them from disclosing information from their customer lists.
As a result of the FTC settlement, consumers who signed up with Stuffingforcash.com, Cashforstuffing.com, or Mailmax, Inc., but did not receive the promised supplies or promised income, can file to receive redress by going to the online complaint form at www.ftc.gov and typing “stuffing” in the subject line. Consumers will be required to provide checks, credit card receipts, or other proof that they were victims of the scam.
In July 2002 a U.S. district court judge shut down the Stuffingforcash.com Web sites of the work-at-home business “opportunity” at the request of the FTC. The FTC alleged that the defendants advertised the sites through bulk e-mail. According to the FTC, in exchange for $40, the defendants promised to provide consumers with sales letters and pre-stamped, pre-addressed envelopes. They claimed consumers would earn two dollars for every envelope they stuffed. Consumers who sent their money did not receive envelopes. If they received anything – and many did not – they got materials urging them to solicit self-addressed envelopes from third parties and forward them to the defendants. At the FTC’s request, a U.S. district court judge prohibited the defendants from engaging in further deceptive practices and froze their assets, pending trial. The stipulated final judgment and order announced today ends that litigation.
The settlement bars Stuffingforcash.com Corp; American Publishing, Inc.; Sound Publications, Inc.; Mailmax, Inc.; and their principals, Nelson Barrero, Eduardo Gonzales, and Ileana M. Morales from engaging in any work-at-home venture or participating in a work-at-home venture offered by others. It bars them from disclosing any of the personal or financial information of any person who submitted information in conjunction with their business. It requires that they pay approximately $221,600 in consumer redress, of which approximately $40,000 has already been returned. It also contains record-keeping requirements to allow the agency to monitor compliance with the order.
As a follow-up to the FTC case, the United States Postal Inspection Service initiated a criminal investigation. In a criminal information filed by the United States Attorney for the Southern District of Illinois, defendant Nelson Barrero pled guilty to two counts of wire fraud. Under sentencing guidelines, he may go to prison for 46 to 57 months. Sentencing is scheduled for September 5, 2003 at the U.S. District Court in East St. Louis, Illinois.
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 judgment and order 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.
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