Defendants Claim Affiliation with Amazon.com and the Government
The Federal Trade Commission has charged three individuals and five companies they control with bilking money from seniors, veterans, and debt-laden consumers by selling them a worthless money-making opportunity purportedly linked to Amazon.com, and luring them with a phony grants program.
At the FTC’s request, a federal court has temporarily halted the operation. The agency seeks to end the alleged illegal practices and obtain money for return to consumers.
According to the FTC’s complaint, the defendants’ telemarketers falsely tell people they represent Amazon and offer, for hundreds or thousands of dollars, to create a website for them linked to Amazon.com, claiming they will earn thousands of dollars every month in commissions for sales via the website. They also falsely offer to advertise the consumer’s website and use search engine optimization to drive customers to it.
The defendants’ telemarketers allegedly also call people, often claiming to represent the government, and falsely tell them they can get government and corporate grants to help pay for home repairs, medical costs, and paying down debt. They ask for thousands of dollars up-front and falsely promise that consumers will receive grants worth tens of thousands of dollars within 90 days.
According to the FTC, the defendants then tried to extract even larger payments from many of these same consumers using a tactic known as “reloading” – offering to sell them additional phony grants and typically promising that they can qualify for larger grants by forming a limited liability company.
Consumers receive no money from these schemes, according to the FTC. Those who call the defendants to complain are ignored, and the defendants provide no refunds.
The defendants are Blue Saguaro Marketing LLC, also doing business as Blue Saguaro Grant Program, Gera Grant, Government Grant Service, Grant Center, and Grant Resources; MarketingWays.com LLC, also d/b/a Amazon.com Associates Program; Max Results Marketing LLC, also d/b/a Amazon.com Associates Program, Amazon Affiliate Program, Amazon Associates Central, Gera Grant and, and Grant Strategy Solutions; Oro Canyon Marketing II LLC; Paramount Business Services LLC, also d/b/a Paramount Business Resources; Stephanie A. Bateluna; Stacey Vela; and Carl E. Morris, Jr. They are charged with violating the FTC Act and the Telemarketing Sales Rule.
The FTC thanks the Phoenix Police Department and Office of the Arizona Attorney General for their important partnership in shutting down this blatant scam.
The Commission vote approving the complaint was 3-0. The U.S. District Court for the District of Arizona entered a temporary restraining order against the defendants on October 11, 2016, and extended this order on October 25, 2016.
NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.
At the request of the Federal Trade Commission, a federal court has found that racecar driver Scott A. Tucker and several corporate defendants in a Kansas City-based payday lending scheme violated Section 5 of the FTC Act and has ordered them to pay $1.3 billion for deceiving consumers across the country and illegally charging them undisclosed and inflated fees.
“This significant court judgment demonstrates the FTC’s determination to crack down on deceptive payday lenders and the people who run them,” FTC Chairwoman Edith Ramirez said. “No consumer should be victimized by an unlawful scheme like this one, and it is especially detestable when those who can least afford to be charged undisclosed and inflated fees are the ones being targeted.”
The $1.3 billion order handed down by the U.S. District Court for the District of Nevada represents the largest litigated judgment ever obtained by the FTC. It stems from a complaint filed in 2012 by the agency, which alleged that the operators of AMG Services Inc. falsely claimed they would charge borrowers the loan amount plus a one-time finance fee. Instead, the defendants made multiple withdrawals from consumers’ bank accounts and assessed a new finance fee each time, without disclosing the true costs of the loan. The judgment represents the difference between what consumers actually paid on the loans and what they were told they would have to pay.
In her latest ruling granting the FTC’s request for summary judgment against the defendants, Chief Judge Gloria M. Navarro found that Scott Tucker ran the operation and was individually responsible for the unlawful conduct. The order announced today bans Tucker and his companies, including AMG Capital Management LLC, Level 5 Motorsports LLC, Black Creek Capital Corporation, and Broadmoor Capital Partners, from any aspect of consumer lending, and prohibits them from conditioning the extension of credit on preauthorized electronic fund transfers, misrepresenting material facts about any good or service, and engaging in illegal debt collection practices.
The operation had claimed in state legal proceedings that it was affiliated with Native American tribes, and therefore immune from legal action, but, in an earlier decision, the district judge found otherwise.
The FTC reached a partial settlement with some of the other defendants in July 2013. In January 2015, AMG Services and MNE Services Inc. agreed to pay $21 million to resolve the charges against them; and in January 2016, Red Cedar Services Inc. and SFS Inc. paid a total of $4.4 million to resolve the case against them.
For information about FTC’s AMG Services refund program, sign up here to get updates by email.
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