Nearly 100 Scams Targeting Struggling Consumers Shut Down by Feds
"Operation Empty Promises," a multi-agency law enforcement sweep, encompasses more than 90 enforcement actions, including three new FTC cases, 48 criminal actions by the Department of Justice, seven civil actions by the U.S. Postal Inspection Service, and 28 prosecutions by state law enforcement agencies.These job-opportunity scams targeted the unemployed and those in desperate need of additional income, fleecing many of them out of thousands of dollars they couldn't afford.
"The victims of these frauds are our neighbors – people who are trying to make an honest living," said David C. Vladeck, Director of the FTC's Bureau of Consumer Protection, during a press conference announcing the operation.
"Under pressure to make ends meet, they risked their limited financial resources in response to the promise of a job, an income – a chance at a profitable home-based business," Vladek added. "But these turned out to be empty promises – and the people who counted on them ended up with high levels of frustration and even higher levels of debt."
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The FTC is also stepping up its education efforts in order help consumers avoid getting scammed in the first place. To that end, the agency encourages consumers to visit a micro-site created to alert them to business opportunity scams. The agency also invites consumers to view its education videos.
"Operation Empty Promises" included actions against the following work-at-home and business-opportunity scams:
Ivy Capital Inc.
The FTC accused Ivy Capital Inc. of defrauding consumers out of more than $40 million by getting them to pony up thousands of dollars to create Internet business they thought would earn them up to $10,000 a month.
According to the FTC's complaint against Ivy Capital and 29 co-defendants, the operation's telemarketers convinced desperate consumers to max out their credit cards upwards of $20,000 to purchase worthless business coaching programs. Ivy Capital's "expert" coaches were anything but, its website-creation software malfunctioned, and the lawyers and accountants who were supposed to provide assistance were nonexistent.
Ivy Capital groomed its victims, the complaint said, calling consumers who responded to e-mails and advertising about opportunities from companies such as Jennifer Johnson's Home Job Placement Program and Brent Austin's Automated Wealth System -- phony companies created by Ivy Capital to generate names and phone numbers for its high-pressure telemarketers.
An FTC-obtained court order has temporarily shut Ivy Capital down, frozen its assets, and appointed a receiver to take control of its corporate defendants.
National Sales Group
National Sales Group, the FTC charged, swindled thousands of job-seekers out more than $8 million by getting chem to pay for worthless job-placement services.
According to the FTC complaint, National sales Group advertised phony, high-paying sales jobs on CareerBuilder.com and other online job sites. When job-seekers took the bait, telemarketers fed them lies about the company's history of recruiting for Fortune 1000 companies and their unique ability to land interviews and get clients hired.
The operation then charged consumers fees for so-called background checks, often billing victims $97 who only had agreed to pay $29 or $38. National Sales Group, the FTC said, also charged some consumers recurring fees of $13.71 per month without their permission.
The scheme generated more than 17,000 complaints to law enforcement agencies, online forums, and job boards, and was eventually dropped by CareerBuilder.com. A court order has temporarily shut down National Sales Group, frozen its assets and placed the company in receivership.
Business Recovery Services LLC
In a disturbing twist on traditional business opportunity schemes, the FTC says Business Recovery Services LLC defrauded consumers out of $1.5 million by selling them useless and expensive kits designed to help them recover money lost to work-at-home scams.
According to the FTC complaint, Business Recovery Services' telemarketers preyed on victims of work-at-home scams with lies about their ability to help them retrieve their money. Unsuspecting consumers paid up to $499 for worthless do-it-yourself kits tailored to hundreds of individual Internet scams. The FTC referred the case to the Justice Department for prosecution.
The agency also announced the shutdown of another scam and settlements against six others, with penalties exceeding $14 million, includingDarling Angel Pin Creations Inc., Global U.S. Resources, U.S. Work Alliance, Inc., Preferred Platinum Services Network, LLC, Abili-Staff Ltd. and Entertainment Work, Inc., and La Asociacion Nacional de Trabajo.
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