Former Beauty Queen Accused of Scamming Thousands of Americans

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former beauty queen accused of scamming thousands of AmericansWhen Juliette Kimoto took to the stage to accept her crown as Mrs. Nevada in 2006, she seemed an obvious fit for the coveted pageant title. Blond and svelte, the native Nevadan had been married to her high school sweetheart for 12 years. She was a mother of six, an active member of her church, and volunteered to provide "mother-to-mother support to pregnant teens and at-risk pregnant women." What she declined to mention, however, was that she was also engaged in an online operation that would eventually rob tens of thousands of people of $30 million.

Nor did she explain that her husband, Kyle, who'd been awarded "Husband of the Year" at the same pageant, owed the government $105 million in court judgments for using a telemarketing scheme to dupe 300,000 Americans out of $43 million. Instead, Juliette proudly claimed her Mrs. Nevada title. In 2008 Kyle was ordered to pay $35 million and sentenced to 29 years in prison, giving him the No. 6 spot on Forbes' list of longest white-collar prison sentences.

This week, the FTC announced a settlement with the former pageant queen that bans her from her many fraudulent activities, including the sale of a dietary supplement that Juliette falsely claimed was backed with scientific data and endorsed by Oprah Winfrey, and marketing nonexistent work-at-home opportunities. Juliette is also charged with enrolling consumers in costly, monthly membership clubs without their consent. Her attorney declined to comment.

The Allure of 'Easy Stimulus' Money

Juliette is one of a growing group of fraudsters taking advantage of the confusion surrounding the government's economic stimulus programs.

"Fraudsters prey upon people's general sense of the economic stimulus plan and the idea that there's all this government money out there to stimulate the economy," explains Lois Greisman, associate director of the FTC's Division of Marketing Practices -- the unit that brought the charges against Juliette. "They use that knowledge of the pools of government money and package it as grants for individuals."

Juliette was involved in a type of scam the FTC calls a "continuity plan." Greisman explains how it works: "A pop-up ad online takes you to a site that might have a wonderful logo with pictures of the president, American flags, the United States seal, the American eagle." The scammers use these iconic images to convey credibility so that the consumer believes the sites' claims that they can help them get a government grant. In Juliette's case, according to the Las Vegas Sun, the website " paraded stimulus funding like some kind of fiscal buffet: With billions more on the way, it's time to get your cut!'"

These types of websites say that for a small fee -- say $1.99 or $2.99 -- they will send you a pamphlet or a CD or provide you access to a password-protected site that can help you get one of these government grants. According to Greisman, "They take your credit card or debit card number and, unbeknownst to you, either because it is buried in the small print or because it just doesn't exist anywhere, they enter you into a buyer's club or membership program -- what we call a 'continuity plan' -- in which you're now billed every month for a club you didn't plan to join and never would have joined. They'll charge you $79 or $89 a month, so you just spent $1.99 and now you're in danger of having substantial monthly debits from your account."

These continuity plan schemes have been "given new life with the economic downturn," says Greisman. This year alone, the FTC has successfully brought charges against four groups of fraudsters engaged in continuity plan schemes that robbed Americans of nearly $1 billion. In all four cases, the FTC has shut down the websites and won monetary judgments that require the scammers to pay up. In Juliette's case, she has been ordered to pay more than $90,000 and turn over a slew of personal assets, including a piano, a 1967 Chevy Camaro, jewelry, and other items valued at more than $130,000.

Though the financial penalty may sound small relative to the size of the scam, it is larger than it may seem. "The judgment is based on the ability to pay," explains Greisman. "You can't get more money from someone than they have. We will absolutely take everything we can, like the piano, and the car, if it exists, but if the money was spent on trips to Vegas or gambling, there's no longer anything tangible to be had." In other words, Kimoto may have been putting up big numbers, but her personal net worth was meager in comparison, and what little she had is now property of the federal government.

As for jail time, the FTC is working on that too. The agency's authority to bring charges is limited to civil court, which means it can't send people to prison, but it routinely partners with agencies that do have the power to prosecute in criminal court. "We have excellent relationships with criminal law enforcement at both the state and federal levels,"explains Greisman, " and we will work with them to seek subsequent or parallel prosecution where appropriate. It's important that crooks know there are consequences if you rip off consumers. There are serious consequences."

Loren Berlin is a reporter with the AOL Huffington Post Media Group. She can be reached at, on Twitter at @LorenBerlin, and on Facebook.

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