Four separate operations responsible for bombarding consumers nationwide with billions of unwanted and illegal robocalls pitching auto warranties, debt-relief services, home security systems, fake charities, and Google search results services have agreed to settle Federal Trade Commission charges that they violated the FTC Act and the agency’s Telemarketing Sales Rule (TSR), including its Do Not Call (DNC) provisions.
The settlements are part of the agency’s ongoing efforts to combat the scourge of illegal robocalls. Under the court orders announced today, the defendants are banned from robocalling and most telemarketing activities, including those using an automatic dialer, and will pay significant financial judgments. The defendant in one of these cases provided the software platform that resulted in more than one billion illegal robocalls.
“We have brought dozens of cases targeting illegal robocalls, and fighting unwanted calls remains one of our highest priorities,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “We also have great advice on call-blocking services and how to reduce unwanted calls at www.consumer.FTC.gov.”
Each proposed settlement order is described below:
Veterans of America
Announced in July 2018 as part of the charity scam enforcement sweep “Operation Donate with Honor,” the complaint against Veterans of America (VOA) alleged Travis Deloy Peterson used fake veterans’ charities and illegal robocalls to get people to donate cars, boats, and other things of value, which he then sold for his own benefit.
The scheme used various names, including Veterans of America, Vehicles for Veterans LLC, Saving Our Soldiers, Donate Your Car, Donate That Car LLC, Act of Valor, and Medal of Honor. Peterson allegedly made millions of robocalls asking people to donate automobiles, watercraft, real estate, and timeshares, falsely claiming that their donations would go to veterans’ charities and were tax-deductible. In fact, none of the names used in the robocalls was a real charity with tax-exempt status.
The proposed order settling the Commission’s complaint, permanently bans Peterson from soliciting charitable contributions and prohibits him from making misrepresentations 1) that an entity identified as a potential recipient of funds is a charity; 2) that a charitable contribution is tax-deductible; and 3) any other material fact related to the solicitation of money from consumers.
The order also bans Peterson from robocalling, prohibits him from deceptive and abusive telemarketing, and imposes a $541,032.10 monetary judgment against him, which will be suspended once he provides significant assets, including 88 vehicles, to the FTC. The Commission vote approving the proposed stipulated order was 5-0.The FTC filed the proposed order in the U.S. District Court for the District of Utah.
NetDotSolutions (James Christiano)
In June 2018, the FTC filed a complaint seeking to stop two related operations and their principals who facilitated billions of illegal robocalls to consumers nationwide, pitching everything from auto warranties to home security systems and supposed debt-relief services. According to the complaint, James “Jamie” Christiano and the companies he controls operate “TelWeb,” a computer-based telephone dialing platform that can be used to blast out a large volume of telephone calls‒‒especially robocalls‒‒in a short time.
For many years, Christiano had a business relationship with Aaron Michael Jones, a recidivist robocaller who was named in FTC lawsuits brought in 2017 and 2018. Most, if not all, telemarketing calls made using TelWeb flowed through Jones and his business partners, including Andrew “Andy” Salisbury, as resellers.
The FTC named two of Christiano’s companies in its complaint. NetDotSolutions, Inc. licensed software to Jones and his clients that allowed them to place illegal autodialed robocalls. TeraMESH Networks, Inc. leased computer server rack space to Jones that enabled him to host, maintain, and update the TelWeb software. The FTC alleged that, through TelWeb, Jones’s operation bombarded consumers with more than one billion illegal robocalls annually.
Based on this alleged conduct, the FTC charged Christiano, NetDotSolutions, and TeraMESH with assisting and facilitating: 1) illegal robocalls; 2) calls to numbers on the DNC Registry; 3) calls with spoofed caller IDs; and 4) abandoned calls, in which TelWeb hung up on consumers who answered.
The FTC’s complaint also charged Salisbury and three of his companies with initiating or causing the initiation of: 1) calls with unlawful prerecorded messages; 2) calls to numbers on the DNC Registry; and 3) calls with spoofed caller IDs. The complaint also charged them with assisting and facilitating TSR violations by others.
The four stipulated court orders announced today settle the FTC’s charges against all but one of the defendants in this case. The first proposed order is against Christiano, NetDotSolutions, and TeraMESH. It bans them from engaging in, or causing others to engage in, telemarketing using an automatic dialer and from assisting others to engage in telemarketing by providing access to an automatic dialer. The order also prohibits them from violating the TSR and imposes a $1.35 million judgment against them, jointly and severally, payable to the Commission.
The other orders, against defendants Salisbury, World Connection, LLC, and World Connection, S.A.permanently ban these defendants from making robocalls, or assisting others in doing so, and prohibit them from abusive telemarketing, including violations of the TSR.
The orders against Salisbury and World Connection, S.A. impose $2.7 million judgments against each of them; the order against World Connection, LLC imposes a $1 million judgment. The judgment against Salisbury will be partially suspended upon payment of $50,000 to the Commission. The judgments against World Connection, S.A. and World Connection, LLC are fully suspended, due to their inability to pay.
The Commission votes approving the four stipulated orders were 5-0.The FTC filed the proposed orders against Christiano, NetDotSolutions, and TeraMESH in the U.S. District Court for the Central District of California, and the orders will not take effect until the court approves them. The same court previously approved the stipulated orders against the other defendants. The FTC has applied for a default judgment against the remaining defendant, World Connection USA, LLC.
Higher Goals Marketing
According to the FTC’s complaint, the Higher Goals Marketing defendants used illegal robocalls to contact consumers and pitch fake debt-relief services. The defendants guaranteed they could substantially and permanently lower consumers’ credit card interest rates, and would save consumers thousands of dollars in interest payments. In reality, the scheme was rarely, if ever, able to deliver the promised results. The complaint also alleged the defendants set up the debt-relief scheme within weeks of a court order shuttering a similar telemarketing operation known as Life Management Services, where several of the defendants had worked.
The final court order announced today permanently bans defendants Brandun L. Anderson, Lea A. Brownell, Melissa M. Deese, Gerald D. Starr, Jr., Travis L. Teel, Wayne T. Norris,and Sunshine Freedom Services from telemarketing and debt-relief services. It also imposes a $3.15 million judgment against the defendants, jointly and severally, which will be suspended after they turn over all of their available assets.
The Commission vote approving the stipulated order was 5-0.The order settles the FTC’s charges against all but one defendant in this case, Higher Goals Marketing, LLC; the FTC is moving for a default judgment against this final defendant.
The FTC brought the case in the U.S. District Court for the Middle District of Florida, Orlando Division, and the judge entered the final order on March 18, 2019. The FTC appreciates the help of Florida’s Office of the Attorney General, Department of Legal Affairs, Consumer Protection Division, and the Florida Department of Agriculture and Consumer Services in this case.
In May 2018, the FTC alleged that this Florida-based scheme deceived small business owners by falsely claiming to represent Google, falsely threatening businesses with removal from Google search results, falsely claiming that they could associate keywords with these businesses, and falsely promising first-place or first-page placement in Google search results.
The FTC’s complaint alleged the defendants had no relationship with Google, yet claimed to be “data service providers” for Google or “authorized Google My Business agencies.” The defendants also barraged consumers with robocalls. The company’s telemarketers falsely told consumers who pressed “one” that they could only avoid removal from Google search results by paying the defendants a one-time fee ranging from $300-$700. Otherwise, they said these businesses would be labeled “permanently closed.”
The following defendants have now entered into settlement agreements that, pending court approval, would resolve the FTC’s amended complaint: 1) Michael Pocker, Modern Spotlight LLC, Modern Spotlight Group LLC, and Modern Internet Marketing LLC; 2) Steffan Molina, Perfect Image Online LLC, and Pinnacle Presence LLC; and 3) Ricardo Diaz. The proposed settlements contain both injunctive and monetary relief, and are intended to remedy the illegal conduct alleged in the complaint.
The proposed orders against Pocker and Molinaand their respective companies ban them from the deceptive sales practices in the complaint, including misrepresenting material facts to consumers. The orders also ban the defendants from robocalls and from calling numbers on the DNC Registry, and require the defendants to disclose their identity to consumers during telemarketing sales calls.
The Pocker order imposes a $1.93 million judgment against him individually, as well as a $3.62 million judgment against his companies. Both judgments will be suspended after Pocker pays more than $18,000 to the FTC. The Molina order imposes a $1.72 million judgment against him individually and a $3.64 million judgment against his companies. Both judgments will be suspended after Molina and his companies turn over $103,000.
The proposed order against Diazcontains the same conduct relief as the orders against the Pocker and Molina defendants, with limited exceptions. The order imposes a $1.81 million judgment against Diaz, which will be partially suspended upon payment of $690,817.
The Commission vote approving the proposed stipulated orders was 5-0.The FTC filed the proposed orders in the U.S. District Court for the Southern District of Florida, and the orders will not take effect until the Court approves them. Litigation continues against the remaining defendants.
Consumers looking for information on ways to limit illegal robocalls can click here.
NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.
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