Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC sends $16M in checks to alleged tax relief scam victims, (Aug 5, 2014)

By Greg Hammond, J.D.

The FTC has announced that it is sending over $16 million in refund checks to 18,571 consumers who were allegedly harmed by American Tax Relief LLC. The refunds come after American Tax Relief and its owners settled charges that they violated Section 5(a) of the FTC Act, after purportedly bilking consumers out of over $60 million as part of a tax relief scam (FTC v. American Tax Relief LLC, File No. 1023083, Case No. 110-cv-06123).

According to the Commission’s complaint, American Tax Relief and its owners allegedly misrepresented that: (1) they significantly reduced the tax debts of thousands of people; (2) consumers qualified for a tax relief program, including compromises or penalty abatements; and (3) by purchasing American Tax Relief’s services, consumers would be able to obtain a settlement that significantly reduces their total tax debts.

The company and owners settled the FTC’s charges in February 2013. As part of the consent order, multi-million dollar judgments were imposed, but were suspended once the defendants and relief defendants surrendered various assets, totaling over $15 million. The assets included cash, a home in Beverly Hills, a condo in Los Angeles, jewelry, and a 2005 Ferrari.

The Commission stated that “affected consumers will receive, on average, 16 percent of the amount they” allegedly lost to American Tax Relief. It also noted that consumers should cash the checks within 60 days of the mailing date.

Companies: American Tax Relief LLC

News: ConsumerProtection FederalTradeCommissionNews