Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION NEWS: FTC halts bogus business and work-at-home opportunity scheme, (Aug 21, 2015)

By Michael Menzhuber, J.D., LL.M.

Pursuant to various judgments and settlements, eight individual and ten corporate defendants, charged with cheating American and Canadian consumers out of more than $7 million, have been banned from selling business or work-at-home opportunities. These orders, along with court orders against 14 other people and companies named in the FTC’s lawsuit, resolve charges that the defendants conned consumers into thinking they could make money by referring merchants in their area to a non-existent money-lending service (FTC v. Money Now Funding, LLC, August 20, 2015).

The defendants, who began operating as “Money Now Funding,” tried to avoid detection by law enforcement by changing product names, office locations, and merchant identities. They falsely claimed consumers would earn up to $3,000 per month by referring small businesses to the defendants to obtain loans. After consumers paid up to $499 to buy the business opportunity, the defendants told them that, to succeed, they had to buy sales leads that cost tens of thousands of dollars but turned out to be worthless. Many victims affected by this scam were seniors with limited income and savings.

The following individual defendants are banned from selling business or work-at-home opportunities: Lukeroy K. Rose, Leary Darling, Solana DePaola, Lance Himes, Cordell Bess, Cynthia Miller, Clinton Rackley, and Richard Frost. The following corporate defendants are also banned from selling business or work-at-home opportunities: Money Now Funding LLC, Rose Marketing LLC, DePaola Marketing LLC, Affiliate Marketing Group LLC, Affinity Technologies LLC, Global Network Marketing LLC, Precise Payroll Services LLC, Strategic Media Advertising LLC, Legal Doxs LLC, and US Doc Assist LLC.

In addition to the ban on selling business or work-at-home opportunities, some defendants are also banned from telemarketing. The judgments and settlements also include provisions that apply specifically to certain defendants, prohibiting them from engaging in the types of misconduct alleged by the FTC. Three of the defendants were subject to summary judgment orders, settlements were reached with six of the defendants, and default judgments were ordered against twenty-three defendants who did not respond to the charges against them.

The judgments and settlements also impose monetary judgments of $7.3 million against 12 defendants, and smaller judgments against others. The judgments against some defendants are suspended due to their inability to pay and, in some cases, pending the transfer of assets frozen by the court or held in receivership. The full judgments will become due immediately if the defendants are found to have misrepresented their financial condition.

The orders were entered by the U.S. District Court for the District of Arizona on June 3 and June 24. Summary judgment orders were entered against defendants Rose, Darling, and Rackley on June 3, and against the default defendants between July 15 and 20.

Companies: Money Now Funding LLC; Rose Marketing LLC; DePaola Marketing LLC; Affiliate Marketing Group LLC; Affinity Marketing Group LLC; Affinity Technologies LLC; Global Network Marketing LLC; Precise Payroll Services LLC; Strategic Media Advertising LLC; Legal Dox LLC; and US Doc Assist LLC.

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