An Ontario corporation and its owner have agreed to settle Federal Trade Commission charges that they defrauded U.S. businesses out of millions of dollars by billing and accepting payment for unauthorized listings and advertisements in non-existent business and travel directories, and for unordered and undelivered office supplies and consulting services.
According to the FTC’s complaint, Gerhard Mintz, 1522838 Ontario Inc., d/b/a International Industrial Trade Directory, and two other individuals, targeted businesses and municipalities nationwide, and hotels and resorts in the U.S. and more than 25 other countries, operating under a series of bogus business names whose addresses were mailbox drops near Toronto.
Under the proposed settlement, Mintz and his company are permanently prohibited from making misrepresentations concerning the sale of good or services, including that consumers have a preexisting business relationship with them, or that consumers have agreed to purchase, or owe them money for, business or travel directory advertisements or listings, office supplies, or consulting services. If the settling defendants have misrepresented their financial condition, a $4 million judgment will be imposed against them.
The FTC’s complaint alleges that the defendants’ invoices for business and travel directory advertising included actual print advertisements that U.S. businesses had placed in legitimate publications such as the Thomas Register of American Manufacturers, the Hotel & Travel Index, and the Officials Meeting Facilities Guide. The defendants allegedly cut ads from the publications and pasted them onto their own bogus invoices in an attempt to deceive consumers into paying the invoices.
According to the complaint, in many instances consumers paid the bogus bills, which ranged from a few hundred dollars to several thousand dollars, not realizing that the listings and advertising were unauthorized. The defendants also allegedly billed consumers for office supplies and consulting services that were never ordered or received by the consumer.
On October 4, 2006, the federal district court in Chicago entered a temporary restraining
order prohibiting the defendants’ deceptive practices and freezing their assets. The remaining defendants, Michael Robert Petreikis, d/b/a William George Fisk, and his wife, Emma G. Wanjiku, are not parties to the settlement.
The FTC investigated this case with the assistance of the Toronto Strategic Partnership, which, in addition to the FTC, includes the Toronto Police Service Fraud Squad, Telemarketing Section; the Ontario Provincial Police, Anti-Rackets Section; the Ontario Ministry of Government Services; Canada’s Competition Bureau; the Royal Canadian Mounted Police; the United States Postal Inspection Service; and the United Kingdom’s Office of Fair Trading. Canada’s Competition Bureau announced on October 27, 2006 that Petreikis pled guilty to three separate criminal charges in Canada and received a prison sentence of four years. See www.competitionbureau.gc.ca/internet/index.cfm?itemID=2221&lg=e.
The Commission vote to authorize staff to file the stipulated final order was 5-0. The order was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division.
NOTE: 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.
Copies of the complaint and order are available from the FTC’s Web site at http://www.ftc.gov and 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 in English or Spanish (bilingual counselors are available to take complaints), 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 thousands of civil and criminal law enforcement agencies in the U.S. and abroad.
Office of Public Affairs
FTC’s Midwest Region
(FTC File No. X07-0003)