Telemarketers slammed with record fine for lying about police, veterans' charities
(To learn more about the FTC, watch this exclusive Consumer Ally interview with FTC Chairman Jon Leibowitz.)
The penalty against Civic Development Group, LLC; CDG Management LLC; and owners Scott Pasch and David Keezer was the largest in FTC history for a consumer protection case.
"This scheme packed a one-two punch: it deceived the people who donated, and it siphoned much-needed funds from police, firefighters, and veterans groups," FTC Consumer Protection Director David Vladeck said in a written statement. "The court's final settlement order packs a one-two punch of its own: a record-breaking financial penalty for violating an FTC order and a lifetime ban on soliciting charitable donations."
To pay the penalty, the company's owners have been ordered to turn over some of the luxuries they've accumulated from their enterprise including:
- a $2 million home
- Picasso and Van Gogh paintings worth a total of $1.4 million
- an $800,000 guitar collection
- $270,000 from a recent sale of a wine collection
- $117,000 in jewelry
- vehicles including three Mercedes, a Bentley and a Range Rover.
The FTC's involvement dates to 1998, when the government alleged Civic Development had misled consumers into believing their donations would buy bullet-proof vests for local police and pay death benefits for the survivors of officers who had died.