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Federal, State, and Local Law Enforcers Target Internet Scams and Deceptive Spam
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The information on this page is presented to you by John Glube of
Head's Up - A Copywriter's Journal
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For Release: November 20, 2003
Federal, State, and
Local Law Enforcers Target Internet Scams and Deceptive Spam
In the latest in a series of law enforcement
initiatives targeting Internet fraud, the Federal Trade Commission,
United States Department of Justice, United States Secret
Service, Federal Bureau of Investigation, and United States
Postal Inspection Service, have filed more than 285 criminal
and civil law enforcement actions targeting Internet scams
and deceptive spam.
"By coordinating our law enforcement
efforts with other federal, state and local law enforcers,
we leverage our efforts and maximize our impact," said Timothy
J. Muris, Chairman of the FTC. "We intend to send a strong
message to those who use the Internet to break the law: Cyberspace
is not outer space and we will trace you, track you, and stop
you."
The FTC announced federal court orders
against 10 individuals and five corporations. They represent
an array of deceptive schemes and illegal scams including
Internet auction fraud, bogus business opportunities, deceptive
money-making scams, and phony credit offers.
GM Funding
The FTC charged that GM Funding and individual
defendants used deceptive spam, including the unauthorized
use of logos of well-known financial institutions such as
Radian Bank, Prudential, and Fannie Mae, to induce victims
to disclose sensitive financial information such as income,
mortgage balances, and home values. According to the FTC,
the spammers purported to offer consumers competitive financing
and refinancing loans. The defendants also allegedly forged
e-mail headers - a technique known as "spoofing" - so that
any undeliverable messages went to e-mail addresses unaffiliated
with them. The FTC also alleged that the defendants deceptively
claimed that consumers who received their solicitations could
opt out of future offers. The FTC charged the defendants with
unfair and deceptive practices, violations of the FTC Act,
and with "pretexting,"- posing as an entity it was not in
order to get sensitive financial information - a violation
of the Gramm-Leach-Bliley Act.
The settlement with GM Funding, Inc., Global
Mortgage Funding, Inc., and Robert D. and Damian R. Kutzner
permanently bans them from sending spam and requires them
to give up $60,500 in ill-gotten gains. The settlement with
Universal IT Solutions, Inc. and Anthony Tamras bars them
from making misrepresentations, or assisting and facilitating
others in making misrepresentations, and contains a suspended
judgment of $60,500.
Easy Money
The FTC charged that five individual defendants
used a variety of fictitious names to promote a fraudulent
envelope-stuffing, work-at-home scheme. The defendants used
deceptive spam and Web sites that claimed that for a $50 fee
consumers would receive envelopes and pamphlets. The promoters
claimed that they would pay consumers $1 apiece for stuffing
the envelopes and claimed that consumers could make $500 to
$1,500 a week doing so. Some of the spam promised that consumers'
payments were fully refundable.
Instead of receiving envelopes and pamphlets,
consumers received a booklet containing instructions on how
to market the defendants' deceptive credit repair manual to
other consumers. No consumers made the promised earnings,
and consumers did not receive refunds.
The settlements with David and Irene Herrera
and James and Vincent Zezula permanently bar them from sending
spam, from making deceptive representations, and from providing
others with the means and instrumentalities to commit deception.
Based on financial statements provided by the defendants,
$7,000 will be provided for consumer redress. Should the financial
representations be found to be inaccurate, $536,412, the total
of their ill-gotten gains, will be due.
Instant Internet Empires
"Instant Internet Empires" touted the money-making
potential of five pre-packaged Internet businesses, promising
that buyers could make more than $115,000 a year using the
product. According to the FTC, for their $47.77 investment,
consumers received the right to reproduce the defendants'
Web site and the right to try to resell its contents to other
consumers. The FTC alleged that to achieve the promised $115,000
in earnings, consumers each would have to sell the product
to 2,400 additional consumers, who would each need to sell
to 2,400 additional consumers to achieve the same earnings,
and so on. According to the FTC, by the third generation of
the scheme, participants would need to make a total of 13,829,760,000
sales, more than twice the earth's population, for each of
them to achieve the advertised earnings.
The stipulated final judgment and order
with Instant Internet Empires and Irwin F. Kern, IV, also
known as Frank Kern, bars them from making false or misleading
income claims, from participating in chain marketing schemes,
and from providing others with the means and instrumentalities
to violate federal laws. Based on financial statements provided
by the defendants, $247,000 will be provided for consumer
redress. Should the financial representations be found to
be inaccurate, the total of their ill-gotten gains, $634,222,
will become due.
Eric Stetzel
The FTC charged that Stetzel offered computers,
computer-related equipment, and other merchandise for sale
on Internet auction Web sites. Consumers who "bought" the
merchandise never received it. The FTC charged Stetzel with
violating the FTC Act and the Mail Order Rule. A default judgment
bars violations of FTC Act and the Mail Order Rule and orders
restitution in the amount of $9,723.66.
Copies
of the legal documents associated with this case are available
from the FTC's Web site at http://www.ftc.gov
and also from the FTC's Consumer Response Center, Room 130,
600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The
FTC works for the consumer to prevent fraudulent, deceptive,
and unfair business practices in the marketplace and to provide
information to help consumers spot, stop, and avoid them.
To file a complaint, or to get free information on any of
150 consumer topics, call toll-free, 1-877-FTC-HELP (1 877-382-4357),
or use the complaint form at http://www.ftc.gov.
The FTC enters Internet, telemarketing, identity theft, and
other fraud-related complaints into Consumer Sentinel, a secure,
online database available to hundreds of civil and criminal
law enforcement agencies in the U.S. and abroad.
MEDIA CONTACT:
Claudia Bourne Farrell
Office of Public Affairs
202-326-2181
STAFF CONTACT:
James Kohm
Bureau of Consumer Protection
202-326-2640
(Civil Action No. SACV 02-1026 DOC (MLGx)
GM Funding)
(Civil Action No. CV 03-3202 GAF (SHSx) Easy Money)
(Civil Action No. CV-S-030396-kjd (LRL) Stetzel)
(Civil Action No. 5:03-CV-0140-3-CAR Instant Internet Empires)
(http://www.ftc.gov/opa/2003/11/dojsweep.htm)
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Related Documents:
FTC
v. Eric Stetzel (DC Nevada),
CV-S-03-0396-KJD (LRL)
FTC
v. Patrick Cella, et al. (D.C.
C.D. Calif, Western Div), Cv 03-3202 Gaf (Shsx)
FTC
v. GM Funding, Inc., et al. (D.C.
C.D. Calif, Southern Div.), SACV 02-1026 DOC
(MLGx)
FTC
v. K4 Global Publishing, Inc., et al. (D.C.
M.D. Georgia), 5:03-CV-0140-3-CAR
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To read "The Death Of E-Mail Marketing?" reviewing the impact Anti-Spam legislation will have on online marketers who use permission based e-mail marketing Use This
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The information on this page is presented to you by John Glube of
Head's Up - A Copywriter's Journal
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To view the original text of the press release titled "Federal, State, and Local Law Enforcers Target Internet Scams and Deceptive Spam" as posted on the United States Federal Trade Commission's Web Site Go Here
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