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Florida couple banned from
selling
work-at-home business opportunities
A husband and wife team doing business through six
corporations and five unincorporated entities are permanently banned from
selling work-at-home business opportunities and from selling chain marketing
schemes, including pyramid and Ponzi schemes, as part of a settlement with the
Federal Trade Commission. The FTC charged the Florida couple in June 2002 with
allegedly operating an online work-at-home scam. The FTC alleged that the
defendants preyed on the fears of the jobless by falsely representing earnings,
job openings, and the technical assistance they would provide prospective
purchasers. In addition, the State of Florida recently charged the couple with
21 counts of racketeering, conspiracy to commit racketeering, and communications
fraud. If convicted, they could each be sentenced to 30 years or more in prison.
The FTC's case was filed in June 2002 as part of
"Operation Busted Opportunity," a coordinated attack on business opportunity and
work-at-home fraud by the FTC, the Department of Justice, and 17 state law
enforcement agencies. The law enforcement sting targeted individuals who used
deceptive earnings claims and paid shills to promote their scams or otherwise
violated consumer protection laws. The FTC's complaint named Michael J. Gardner
and Rebecca Dahl Gardner, doing business as Home Typist International, Datapros,
Professional Data Services, New Age Information Specialists, and Work At Home
Direct, and their group of related corporations: Leading Edge Processing, Inc.;
Quality Publishing, Inc.; Mega Processing Corp.; Creative Tech of America, Inc.;
Digital Inputting Corp.; and The Bair Group. The defendants operated out of
Kissimmee and Orlando, Florida.
The FTC alleged that the defendants used false earnings
claims in e-mails and online advertisements to deceptively market and sell
work-at-home data entry job opportunities.
According to the FTC, the defendants e-mailed job seekers
who posted their resumes on job Web sites, and advertised their work-at-home
data entry positions on such Web sites and in local newspapers. The defendants
allegedly lured prospective purchasers with e-mail solicitations and ads falsely
claiming actual jobs with potential incomes such as $187.50 per day or $937.50
per week, and guaranteeing a steady stream of work.
The FTC's complaint alleged that the defendants falsely
claimed they would provide actual jobs to consumers who purchased their
work-at-home opportunities for fees ranging from $59 to $150. In addition, the
defendants allegedly misrepresented that they would provide potential purchasers
with specialized software, manuals, and training that would enable them to earn
a substantial income by processing orders or medical bills using a software
program that allegedly permitted access to some health care provider or bill
processor sites on the Internet. In fact, the FTC noted, many consumers who
spent $59 to $150 received nothing, and those who did receive the software
complained that they could not open the program; that the program was
incompatible with the consumers' computer systems; that it failed to function
properly; or that it destroyed existing data. The FTC also alleged that there
were no jobs available for purchasers, and that the defendants provided
purchasers with no orders or medical bills for data entry. Consumers reported
that after the defendants received their payments, consumers earned no money and
received no response to their complaints or inquiries.
To settle the FTC charges, the defendants are permanently
banned from engaging in the sale of work-at-home business opportunities and from
operating any chain marketing program. The settlement also prohibits the
defendants from selling or disclosing their customer lists, and from using
aliases, including in the text of any commercial e-mail. The settlement contains
a $200,000 suspended judgment, but the defendants would be liable for the entire
amount if it is found that they made material misrepresentations or omissions in
their financial disclosure forms or deposition testimony. In addition, the
settlement contains various recordkeeping requirements to assist the FTC in
monitoring the defendants' compliance.
The FTC received valuable assistance on this matter from
the State of Florida Office of the Attorney General, the Central Florida Better
Business Bureau, and the Orange County Sheriff's Office.
The Commission vote to authorize staff to file the
stipulated final judgment and order for permanent injunction was 5-0. It was
entered by the District Court for the Middle District of Florida in Orlando,
Florida on March 6, 2003.
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