FTC Files Contempt Charges Against Shady Marketer
Sam Tarad Sky settled FTC charges in 2010 for illegally marketing credit repair and debt relief services. The FTC says Sky and three of his businesses are at it again, and it charged them with lying to cash-strapped consumers by telling them almost anyone can qualify for food stamps. The defendants also encouraged consumers to mislead the government about their finances in order to qualify for food stamps.In its latest crackdown against fraudsters preying on consumers in dire financial straits, the FTC agency wants to ban the defendants from selling credit repair, debt relief, or government-related goods or services, and force them to compensate defrauded consumers.
The FTC charged that Sky, Allrepco LLC, Credit Restoration Brokers LLC, and Debt Negotiations Associates LLC violated the terms of a March 2010 court order resolving charges that the defendants deceptively marketed credit repair and debt relief services, as well as illegally charged an up-front fee for credit repair services.
The court order barred them from deceptively marketing any goods or services and from violating the Credit Repair Organizations Act.
Despite the court order, the FTC charged, Sky and his companies used two websites to promote a food stamp application guide chock full of lies and promises that showed how "almost everybody" or "virtually everyone" can "legally apply for food stamps" or "legally get [food stamps] for free."
Sky sold the valueless guide for either a one-time fee of $99 or as part of "Financial Solution Package" that cost consumers a monthly recurring fee of up to $139. Because of long-standing government restrictions, only low-income households qualify for the federal food stamp program, as opposed to "virtually everyone."
The guide, however, repeatedly encourages victims to dupe the government with misleading information in order to improve their chances of eligibility – advising, for instance, any high-income residents of a household to temporarily move out. Following this advice, the FTC said, would leave consumers open to federal civil or criminal charges.
The FTC also charged the defendants with marketing the food stamp application guide throughout the United States without notifying consumers that the guide only contained information about the application process for one state – Florida.
The bogus guide also bills itself as "a Florida consumer assistance product" in order to fool consumers into believing it's affiliated with the state, which it isn't, as you can see from Florida's official Division of Consumer Services web page and the state's food stamp application web page.
The FTC also accused Sky and his companies of charging up-front fees for credit repair services, failing to file required disclosures about their debt relief services, and neglecting to fully report all of his business activities, all in violation of the court order.
The civil contempt action was filed in the U.S. District Court for the Middle District of Florida, Fort Myers Division on April 12, 2011, with the assistance of the Florida Department of Children and Families.