FTC Cracks Down On Con Artists Who Target Jobless Americans

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WASHINGTON, D.C.—The Federal Trade Commission announced a new crackdown on con artists who are preying on unemployed Americans with job-placement and work-at-home scams, promoting empty promises that they can help people get jobs in the federal government, as movie extras, or as mystery shoppers; or make money working from their homes stuffing envelopes or assembling ornaments.

With the U.S. unemployment rate just under 10 percent, the FTC is redoubling its efforts to put a stop to these schemes, which make life even more difficult for hundreds of thousands of Americans already wrestling with the economic downturn.

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As part of the law enforcement sweep announced Wednesday, dubbed “Operation Bottom Dollar,” the FTC has filed seven cases against the operators of deceptive and illegal job and money-making scams and announced developments in four previously filed job scam cases. In addition, the sweep includes 43 criminal actions by the Department of Justice, many involving the substantial assistance of the U.S. Postal Inspection Service, as well as one additional civil action by the Postal Inspection Service and 18 actions by state attorneys general.

During a joint press conference today at the FTC, David C. Vladeck, Director of the FTC’s Bureau of Consumer Protection, was joined by Tony West, Assistant Attorney General for the Civil Division of the Department of Justice; Ohio Attorney General Richard Cordray; and a Grandview, Texas, job seeker who lost money to a company that made false promises of full-time work with benefits.

The FTC announced seven new cases against promoters of the job and money-making scams, including one that victimized more than 100,000 people. This brings to 11 the number of cases the agency has brought since last spring challenging these types of operations. In each case, the FTC got a court order temporarily barring these operators from continuing their deceptive, illegal tactics and freezing their assets. The FTC also is asking the courts for permanent orders that would allow the agency to try to get money back to reimburse victims. In two of the matters announced Wednesday, criminal authorities executed search warrants, and arrested the two operators of one of the businesses.

In the law enforcement actions announced Wednesday, the FTC charged that:

Government Careers Inc. and three principals preyed on job seekers since at least March 2009 by running deceptive ads on job Web sites. Government Careers claimed it could help people get postal, border patrol, and wildlife jobs as well as administrative support and clerical positions with the federal government. It told people they could get these jobs if they paid $119 for study materials, which would allow them to pass any required test with a score of 95 percent or better.

But according to the FTC complaint, those who paid the fee found that there are no exams for the positions they sought, or that the supposed job vacancies did not exist. The company also hawked career counseling services, charging $965 for services like resume editing and employment exam preparation. Although the defendants said that consumers would not have to pay the fee until they got a government job, the defendants allegedly demanded payment before consumers obtained the promised jobs.

The Arizona Attorney General’s Office is the FTC’s co-plaintiff in this case, which was filed in the U.S. District Court for the District of Arizona. After the court issued a temporary restraining order, the defendants agreed to an interim order that prohibits any alleged misconduct pending resolution of the case.

Real Wealth, Inc. and its principal allegedly conned more than 100,000 people by selling them booklets that supposedly explained how they could earn money by applying for government grants and working from home mailing postcards and envelopes.

Using direct mail campaigns that sometimes targeted the elderly and disabled, Real Wealth lured consumers, according to the FTC complaint, with deceptive solicitations such as “Collect up to $9,250 with my simple 3 minute form” or “All I do is mail 30 postcards everyday and I make an extra $350 a week!”

Real Wealth also allegedly claimed that consumers could “rake in up to $1,500+ per week or more in solid cash” by learning “secrets” about the “$700 billion banking industry bailout.” This case was filed in the U.S. District Court for the Western District of Missouri. After the court issued a temporary restraining order, the defendants agreed to an interim order that prohibits any alleged misconduct pending resolution of the case.

Darling Angel Pin Creations and two principals allegedly claimed on the Internet and in newspaper advertisements that by purchasing a starter kit, consumers could earn up to $500 per week assembling angel pins, and that no experience, special tools, or sewing skills were required. Consumers paid between $22 and $45 to get started, and sometimes paid hundreds more for the supplies they would need to make the pins.

However, according to the FTC’s complaint, there was a catch: Consumers were required to have one of their assembled angel pins approved by the company before they could make any money – but the company rejected nearly all the angel pins consumers submitted, no matter how well-made. The FTC charged that the defendants made false and baseless claims that consumers could earn substantial income from angel pin assembly, when in fact they could not.

This case was filed in the U.S. District Court for the Middle District of Florida, Tampa Division. After the court issued a temporary restraining order, the court issued interim orders with regard to all the defendants in the case prohibiting further misconduct.

Abili-Staff, Ltd., two principals, and a related entity sold supposed work-at-home opportunities online. Billing itself as a “scam free” and “legitimate” job search service, Abili-Staff sold supposedly pre-screened lists of jobs, telling consumers they could access the lists after paying a fee ranging from $29.98 to $89.99, according to the FTC’s complaint.

The FTC alleged that defendants falsely told consumers they would have unlimited access to more than 1,000 work-at-home job listings, and that they would get their money back if they did not get a job. This case was filed in the U.S. District Court for the Western District of Texas, San Antonio Division. The court issued a temporary restraining order pending a preliminary injunction hearing held February 16-17, 2010.

Entertainment Work, Inc. and two principals marketed memberships in a Web site that was supposed to list jobs as movie extras, jobs on television, or jobs in print media. By telemarketing and placing advertisements on Web sites and in newspapers across the country, the defendants sold trial memberships for $19.95 to $24.95, and automatically converted those into annual memberships for an additional fee of $80 after two weeks, according to the FTC complaint.

The FTC charged that Entertainment Work deceptively claimed consumers would find entertainment and media jobs near where they lived, without regard to their experience, skills, or appearance. The complaint also charged that the company failed to disclose that to cancel their membership, people would have to pay an additional fee or undertake a burdensome process. This case was filed in the U.S. District Court for the Southern District of Florida. The defendants have agreed to an interim court order that immediately halts the alleged misconduct.

Independent Marketing Exchange, Inc. and its principal allegedly made false earnings claims, and additional misrepresentations in the course of selling a smorgasbord of work-at-home opportunities, including an envelope mailing opportunity, a postcard mailing opportunity, and a mystery shopper opportunity.

The FTC’s complaint alleged that the defendants falsely represented to consumers that they could make substantial amounts of money. The case was filed in the U.S. District Court in the District of New Jersey. After the court issued a temporary restraining order, the defendants agreed to an interim order pending a further hearing.

Preferred Platinum Services Network and the husband-and-wife team who owned and operated it allegedly marketed a work-from-home scheme in which consumers were told they could earn significant sums by labeling postcards describing a non-existent product promoted by Preferred Platinum called “mortgage accelerator.”

Advertised in local pennysavers and newspaper classified sections, and at the defendants’ Web site, the alleged scheme touted earnings of up to $1 per postcard, as well as a 60-day money-back guarantee. Consumers paid an enrollment fee of $80 to $90, and they typically did not learn until later that they would have to pay $40 more for each additional batch of 100 postcards, according to the FTC complaint.

At the same time this matter was filed, criminal authorities executed search warrants on the business and arrested the husband-and-wife team, charging each of them with one count of mail fraud. This case was filed in the U.S. District Court for the District of New Jersey. The court issued a temporary restraining order, followed by a preliminary injunction on Feb. 16. Both individual defendants also have been indicted by a grand jury.

The FTC also announced partnerships with the online job placement service Monster.com, the search engine Bing, by Microsoft, and the centralized network of online communities Craigslist, to help job seekers recognize job scams so they can avoid being victimized. Monster, Careerbuilder, Bing and Craigslist will display FTC consumer education material to people who are using the companies’ web sites to look for jobs.

“Federal and state law enforcement officials will not tolerate those who take advantage of consumers in times of economic misfortune,” Vladeck said. “If you falsely advertise that you will connect people with jobs or with opportunities for them to make money working from home, we will shut you down. We will give your assets to the people you scammed, and, when it’s appropriate, we’ll refer you to criminal authorities for prosecution.”

“Employment and business opportunity fraud causes terrible hardship to those who are suffering the most in these difficult economic times,” said Assistant U.S. Attorney General Tony West. “The Justice Department is committed to prosecuting those who defraud through false promises of employment or financial success.”


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