The Federal Trade Commission has won a $29.8 million judgment in a lawsuit charging several Nevada companies and individuals deceived consumers nationwide with bogus online offers for dietary supplements and assistance in obtaining credit and government grants.
The FTC said that beginning in about January 2009, a company called Grant Connect deceived consumers into believing that by paying fees, it would help them obtain government grants.
The FTC said in the 2009 lawsuit that the company’s marketing included a website showing a photo of President Obama and Vice President Biden with an American flag and a caption in large blue and red letters saying: “CHANGE Is Here! $15 BILLION in FREE Government MONEY for you!”
“There are few, if any, grants available to the average individual consumer,” the FTC said in its lawsuit, noting grants have strict eligibility requirements and that the bulk of them are awarded to colleges, universities and other nonprofits.
In other alleged schemes, one or more of the defendants offered phony lines of credit, bogus work-from-home schemes and sold capsules of “Acai Total Burn,” which was misrepresented to have health benefits, the government alleged.
The defendants sought dismissal of the allegations with a summary judgment motion, most of which was denied by U.S. District Judge Philip Pro in Las Vegas last month.
Pro wrote in his order that consumers signing up online for grant programs agreed to a charge of $2.78 on their credit or debit card accounts, but then were charged $39.95 per month only to find that “grants were not available for individual needs as advertised, finding any grant was neither quick nor easy and much of the material in the database was outdated, further reducing the likelihood of obtaining a grant.”
Pro then entered a permanent injunction against one group of defendants and signed the $29.8 million judgment against them on Nov. 2.
The FTC said the injunction requires them to pay the $29.8 million to the government and bans them from marketing or selling grant-related products and services, credit-related products, work-from-home and business opportunities and dietary supplements.
It also bans the defendants from using “continuity programs” and “negative option marketing,” in which consumers have to opt out of receiving products to prevent being charged on a recurring basis; using testimonials in connection with any product or service; and using preauthorized electronic fund transfers that charge consumers’ debit accounts.
The defendants named in the injunction include several Nevada residents whose city of residence was not listed in the complaint: Kyle Kimoto, Steven R. Henriksen, Tasha Jn Paul, Rachel A. Cook. James J. Gray and Randy D. O’Connell.
Also named was Michael L. Henriksen Jr. of New Zealand.
Also named were Acai Inc. of Las Vegas; Allclear Communications Inc. of Las Vegas; Consolidated Merchant Solutions LLC of Reno; Dragon Group Inc. of Las Vegas; Elite Benefits Inc. of Las Vegas; Global Fulfillment Inc. of Las Vegas; Global Gold Inc. of Las Vegas; New Zealand firm Global Gold Limited; Grant Connect LLC of Reno; Healthy Allure Inc. of Las Vegas; Horizon Holdings LLC of Reno; MSC Online Inc. of Las Vegas; O’Connell Gray LLC of Reno; OS Marketing Group, LLC of Reno; Paid To Process Inc. of Las Vegas; Premier Plus Member Inc. of Las Vegas; Total Health Inc. of Las Vegas; and Vcomm Inc. of Las Vegas.
The FTC earlier this year settled similar allegations against several other defendants in the case, including Johnnie Smith of Miami, Pink LP of Las Vegas, Vantex Group LLC of Las Vegas, Vertek Group LLC of Las Vegas, Juliette M. Kimoto Asset Protection Trust and Juliette M. Kimoto, aka Juliette Madonna Rather, with a city of residence not listed in Nevada. She was the spouse of Kyle Kimoto while they ran Vantex and Vertek in Las Vegas, the complaint says.