Telemarketers Stole $200 Million, FTC Says
MANHATTAN (CN) - Telemarketers working out of the Empire State Building defrauded elderly and disabled people of $200 million by promising to help them start Internet-based businesses, the FTC claims in court.
The Federal Trade Commission sued the Tax Club Inc. dba Success Merchant Services dba Corporate Tax Network dba Corporate Credit dba E-Tax Hotline, and 12 other businesses and four people, in Federal Court.
The states of New York and Florida also are plaintiffs.
The states and the FTC say they sued "to halt an ongoing deceptive telemarketing enterprise operating out of the 60th floor of the Empire State Building that has victimized thousands of consumers across the country, many of whom are elderly and disabled."
The complaint states: "(T)he defendants dupe consumers who are looking to earn income by working at home or start their own internet business into spending thousands of dollars for an array of purported small business development services. Defendants cold call customers first pretending to be affiliated with other companies that have already done business with the consumers. Defendants then proceed to falsely promise to provide individualized, unlimited guidance from experts and experienced professionals and falsely claim that their services will pay for themselves and enable the consumers to recoup the thousands of dollars they have already spent to start up their own businesses.
"The telemarketing operation is comprised of twelve interrelated business entities set up and operated by the four named individual defendants. The operation has taken in over $200 million from consumers since 2008. The four individual defendants have funneled approximately $50 million from the operation to personal bank accounts linked to them or their close relatives and to other personal businesses and assets including two real estate properties in the state of Washington."
The FTC wants the defendants' assets frozen, and an injunction.
The plaintiffs say they have filed a "five-volume appendix containing ... audio files and transcripts of recorded sales calls between defendants and consumers, telemarketing scripts used by defendants, and declarations from consumers, the Better Business Bureau, payment processing entities used by the defendants to process consumer sales transactions, and investigators and an economist employed by the Federal Trade Commission."
Also names as defendants are Manhattan Professional Group Inc., 5410 Inc., Marble Base Inc., 6015 LLC, Accounting Group Services, 1800Accountant LLC, IKongo Inc., Visavis Inc., HB Marketing Services LLC, Premier Coaching and Consulting LLC, Skorpios Holdings Inc., Edward B. Johnson, Michael M. Savage, Brendon A. Pack and Gary J. Milkwick.