Defendants Barred from Selling Fake Licenses and Diplomas
(Corrected to provide Amended Complaint)
Three companies and three individuals marketing fake international driver’s permits (IDPs), college and university diplomas, academic transcripts, and related materials have settled charges that they engaged in deceptive behavior. The proposed settlement prohibits Mountain View Systems, Ltd., Wheelie International, Ltd., S.C. Hyacinth S.R.L, Jason Abraham, Caroline Shallon, and Charles Fogel from selling IDPs, diplomas, and transcripts, and requires them to pay $57,000 in disgorgement.
“You can’t get a legitimate driver’s license or university degree without doing the work to earn it,” said Howard Beales, Director of the FTC’s Bureau of Consumer Protection. “These phony credentials serve no purpose other than to deceive.”
International Driver’s Permits
Authentic IDPs enable a person with a valid driver’s license to drive in foreign countries that have signed the 1949 United Nations Road Traffic Convention. The IDP is a simple booklet that translates a consumer’s government-issued driver’s license into different languages. It is not a substitute for a valid, government-issued license, and cannot be used in place of a suspended or revoked license or as a government-issued identification card. Further, it will not protect consumers from traffic tickets or “points.” In the United States, legitimate IDPs cost $10 each, and can be obtained only from the American Automobile Association (AAA) and the American Automobile Touring Alliance (AATA).
The Commission’s Complaint
The FTC’s complaint in this matter was brought as part of “Operation License for Trouble,” a six-case, nationwide law enforcement sweep charging marketers of IDPs with scamming consumers out of hundreds of dollars each. In its complaint, the Commission alleged that the defendants deceptively marketed their IDP documents as legal substitutes for state-issued driver’s licenses. The FTC also alleged that the defendants misrepresented that their IDPs enable consumers to drive legally in the United States and abroad, enable consumers to protect themselves against traffic violations, and could be used as a legitimate form of government photo identification – all in violation of the FTC Act. The Commission alleged that the defendants’ scam placed consumers, including immigrants and those with limited English proficiency, at risk of legal action or arrest if caught driving without a valid license or presenting false identification. In addition, the Commission argued that these worthless documents would encourage unlicensed drivers or drivers with suspended or revoked licenses to drive illegally.
During its investigation, the FTC also discovered that the defendants sold phony academic degrees along with extensive verification materials, such as transcripts and letters of recommendation, and Web sites for their phony universities. Purchasers of the defendants’ materials used them to represent falsely to consumers that the diplomas evidenced that the purchaser had completed and shown proficiency in a curriculum recognized as necessary to earn the academic degree, and that established colleges or universities issued the diplomas. The FTC charged that the degrees were invalid. Thus, the FTC alleged that the defendants were providing others with the means and instrumentalities to commit deceptive acts and practices in violation of the FTC Act.
Terms of the Stipulated Order
The stipulated final order announced today addresses the defendants’ allegedly illegal conduct, as well as requiring disgorgement of their financial assets. First, the defendants are permanently barred from promoting or selling – or helping others to promote or sell – any IDP or any other identification document, fake identification document, or identification template, even if sold as a novelty item. This is an appropriate remedy, the FTC contends, as there is not legitimate use for such phony documents.
Next, the order permanently bars the defendants from promoting or selling – or helping others to promote or sell – academic degrees and academic verification materials such as transcripts. The ban does not prohibit the individual defendants from working for an accredited school that provides a curriculum to obtain a degree or other academic certifications.
In addition, the order prohibits the defendants from making misrepresentations about academic degrees, IDPs, or other identification documents, and any other good or service. The order also prohibits the defendants from selling their customer lists, and subjects them to monitoring to ensure that they comply with its terms.
Finally, the order requires the defendants to turn over approximately $57,000 in assets. If they are found to have misrepresented their financial condition, a $5 million avalanche clause would become effective.
The Commission vote to approve the order was 5-0. It was filed in the U.S. District Court for the District of Columbia, on November 24, 2003, and requires the signature of the judge.
NOTE: This stipulated final judgment is for settlement purposes only and does not constitute an admission by the defendants of a law violation. Stipulated judgments have the force of law when signed by the judge.
Copies of the Commission’s complaint and stipulated final judgment 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, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies worldwide.
(FTC File No. X030018; Civ. No. 03-CV-00021-RMC)
Mitchell J. Katz,
Office of Public Affairs
Gregory A. Ashe
Bureau of Consumer Protection