BOISE, Idaho (CN) - The Tax Club took $100,000 from an elderly woman and claimed it would help her start a small business, but didn't provide her with so much as a website, the woman claims in court.
Sally Naranche sued the Manhattan Professional Group dba The Tax Club, in Ada County Court. She claims the New York-based defendants took more than $100,000 from her - $36,000 in the first 2 weeks alone - and provided little more than incorrect tax advice and a few do-it-yourself legal documents.
Naranche claims The Tax Club solicited her business, and claims it could help her get a small business loan and provide her with support services, consultation, and tax advice.
Naranche, who wanted to start an online business selling environmentally friendly products, claims the Tax Club charged her an initial $20,000, and once it got the number of her credit cards, "began charging her credit cards hundreds, and sometimes thousands, of dollars per charge, without authorization. On many occasions, MPG made multiple such charges across different credit cards over a one-day period."
She claims that when she told the defendants she wanted to sell green products online, "MPG responded that it was a 'great idea' and then exerted high-pressure sales tactics, requiring upfront payment and credit card information for multiple credit cards."
Naranche says she dipped into her retirement account to pay the first $20,000, and the company took another $16,000 in the first 2 weeks, "both directly and through credit card charges."
Naranche claims The Tax Club began milking her in the spring of 2010 and told her in July that year that she had to pay another $19,900, which she paid by cashier's check.
It didn't stop there: "MPG continued calling Sally for more money," the complaint states. "When Sally expressed hesitation due to the excessive charges or confusion over how to proceed because she was old, confused and inexperienced in such matters, MPG and its representatives made repeated assurances to Sally such as: 'You are doing right,' 'You are on track,' 'We'll help you,' 'We'll take care of it,' 'You will make big money in no time,' and 'it's going OK, we're just ready to get started.'"
Naranche claims the defendants told her she could get her money back by writing herself a check from her small business loan and that she would be making money within 60 days of "engaging their services."
"MPG represented that they would assist Sally in obtaining a small business loan," the complaint states. "However, after MPG had received substantial amounts of money, it informed Sally that it would not actually assist her in obtaining the small business loan and that she would have to do that herself. Sally went to Wells Fargo to obtain a small business loan and was denied due to the fact that MPG has maxed out her credit and had not yet actually formed a business on her behalf."
Naranche claims The Tax Club promised it would create "several" websites for her business, but she "never saw any website and does not believe one was ever created."
When she complained, she says, the defendants told her she couldn't quit the program because she had signed a contract.
To top it off, she says, "MPG prepared Sally's tax return in 2010 incorrectly. They informed Sally that she owed $2,400 to the IRS. MPG then required Sally to pay them money to begin a payment plan with the IRS, which she did. Sally subsequently discovered that her taxes were prepared incorrectly and that the IRS, in fact, owed her $1,600 in tax refunds."
In the end, Naranche says, the defendants told her she could quit the program, but the money she had paid was non-refundable.
She says the ordeal cost her 25 percent of her monthly income and more than 25 percent of her retirement fund.
"In exchange for over $100,000 in payments to MPG and its related entities, Sally has received only a binder with a generic business plan, an incorrectly filed tax return for 2010, a form business filing with her name inserted and which she had to file with the Idaho Secretary of State herself, and a couple online webinars," the complaint states. "Sally never received the promised help obtaining a small business loan and never saw any website that had been created for her company."
Naranche seeks restitution, with interest, and damages for consumer law violations, breach of contract and unjust enrichment.
She is represented by Tyler Rands with the Wright Brothers Law Office.
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