North Carolina Division of Aging and Adult Services
TO NCSCF TASK FORCE MEMBERS
Below is an announcement concerning the conclusion of a federal case against telemarketers based in North Carolina, Kansas and Utah who allegedly obtained money from consumers throughout the US through deceptive representations that they would receive grants. One of the Utah defendants and its successor companies apparently continued to pitch their grant services to North Carolina consumers until earlier this year, and some of their victims were brought to the attention of Attorney General Roy Cooper by members of this Task Force. The Attorney General is working to secure refunds or credit card charge-backs for those elderly victims. If you know of other NC victims of these companies in your community or service area, please invite them to submit complaints to Attorney General Cooper’s Office. They can obtain complaint forms by calling 919-716-6000 or by going on-line (www.ncdoj.gov).
Grant scammers’ tangled web dismantled, AG Cooper says
Raleigh: A network of fraud artists from North Carolina to Utah is now barred from pitching phony government grants, Attorney General Roy Cooper said today.
Attorneys from North Carolina, the Federal Trade Commission, and the states of Illinois, Kansas and Minnesota have pursued the complex scheme in federal court in Kansas since 2009. Cooper and the other plaintiffs have now won court orders or settlements that resolve the case against fifteen defendants implicated in the scheme.
“Grant scams prey on people’s hopes and waste their money,” Cooper said. “We’re working to shut down these scams in North Carolina and across the country.”
The companies and individuals behind the scam used telemarketing and misleading tactics to convince consumers to pay for services that were supposed to help them win grant money from the government. Consumers who paid for the help never won any grants or received any money.
Defendants Affiliate Strategies, Landmark Publishing Group, Grant Writer’s Institute, Answer Customers, and Apex Holdings International, all of Overland Park, Kansas are permanently banned from telemarketing, misrepresenting products and their costs, misleading consumers, and pitching money-making opportunities under a default judgment issued by Judge Robinson. Defendants Brett Blackman, James Rulison and Jordan Sevy of Overland Park, Kansas worked with the companies and agreed to similar bans.
The companies’ assets are being liquidated and any proceeds will go to pay consumer refunds and cover the costs of bringing the case.
Judge Robinson also issued a default judgment against defendant Direct Marketing Services of Utah, banning the company from telemarketing, misrepresentation, misleading consumers, and pitching money-making opportunities. The company was ordered to pay $3.4 million.
Defendants Wealth Power Systems and Aria Financial Services of Utah are banned from marketing grant-related products and services, illegal telemarketing, making misrepresentations, and misleading consumers under a settlement agreement. Justin Ely of Utah, who worked with the companies, agreed to a similar ban. The companies will pay $265,000, the total amount of their assets, toward consumer refunds and the costs of the case. If they’re found to misrepresent their assets, they will have to pay $3.4 million.
The states and the FTC are trying their case against remaining defendant Meggie Chapman in U.S. District Court in Kansas this week.
How the scam worked
People who bought the guide then got follow up pitches offering grant research services for $995. Consumers were told that the groups’ grant researchers had a “70% success rate”. Consumers who paid the additional fee got a list of grants, contests, loans, and social welfare programs.
Consumers who paid for grant research services then got another pitch, this time asking for $265 per page for grant writing help or $1,000 for grant coaching. Telemarketers who made the pitch encouraged consumers to pay for help applying for multiple grants. No one actually won a grant.
How to avoid grant scams
“Don’t pay upfront money for help winning grants, no matter what the scammers promise you,” Cooper said. “If you spot a grant scam, report it to my office.”
******End of Alert******
Date: August 25, 2011
David N. Kirkman
NC Senior Consumer
Fraud Task Force
Trade Commission Alerts