California Department of Corporations, Federal and State Law Enforcement Agencies Launch Major Assault on Business Opportunity and Work-at-Home Scams
Business Wire, Feb 23, 2005
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SACRAMENTO, Calif. -- In a massive criminal and civil crackdown on promoters of illegal business opportunity and work-at-home programs, the California Department of Corporations (Corporations), the Federal Trade Commission (FTC), the U.S. Department of Justice, the U.S. Postal Inspection Service, and state law enforcement agencies from 13 other states have charged more than 109 operations with violating consumer protection laws and/or engaging in fraud. Business opportunity and work-at-home fraud, in particular, cause substantial consumer injury. In California's cases, Corporations took enforcement actions against franchises and business opportunities that illegally offered or sold business operations for payday advance loans, medical spas, mobile food kiosks, Internet kiosks, fitness centers, and restaurants.
"The perpetrators of these frauds were operating illegally and without the proper registration from Corporations to offer and sell franchises," said Corporations Commissioner William P. Wood. "By coordinating efforts with federal regulators and law enforcement, we can move aggressively to stop these scam operations which prey on unsuspecting consumers."
The enforcement sweep, known as Project Biz Opp Flop, highlights enforcement actions filed by a multitude of state enforcement agencies, including Corporations. The 14 states, including Maryland, Texas and Washington, announced 109 actions against franchise, business opportunity, and work-at-home promoters. The perpetrators are located in 22 states and Canada, with the greatest number of actions taken in California, Florida and Arizona. (See below listing of state actions.)
Corporations has teamed up with the FTC to provide the following tips for consumers before investing in any new business venture or work-at-home opportunity:
--Investors may contact Corporations before they invest to check the registration status of the investment they are considering by calling our toll-free telephone number, 1-866-ASK-CORP (1-866-275-2677).
--If the ad promises big money for little effort, then investors should check with Corporations, the FTC, and local authorities. Fraudulent ads use similar bait such as fast cash, minimal work, no risk, and the advantage of being your own boss or working from home.
--Before promoters may accept money from potential investors, the law requires that they give investors important disclosure documents. If the promoter does not make the document readily available, find another opportunity.
--Talk to current investors, but beware of paid "shills," people paid to give favorable reports. Visit other business sites in person. Get professional advice if you need it. Do not lose your life savings just because you did not spend a few hundred dollars to talk to a lawyer, an accountant, or another expert.
Consumers should visit Corporations Web site at www.corp.ca.gov for information to help spot and avoid business opportunity scams.
The Department of Corporations is California's Investment and Financing Authority. Corporations is responsible for the regulation, enforcement and licensing of securities, franchises, off-exchange commodities, investment and financial services, independent escrows, consumer and commercial finance lending and residential mortgage lending. For further information or to obtain a complaint form, please visit Corporations' Web site at www.corp.ca.gov or call 1-866-ASK-CORP (1-866-275-2677).
PROJECT BIZ OPP FLOP
State Enforcement List for Calendar Year 2004 & Early 2005
California Department of Corporations
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California
2. Cash Now.com, LLC, Cash Now Plus.com, LLC, Miro Zecevic, C&D Order, PA and Ontario, Canada parties, Cal. Dept. Corp. (4/2/04).
3. Cash-Now USA.Com, Inc., Cash Now.com, LLC, Miro Zecevic, David G. McClenan, Gary McNulty, Victor Graham, C&D Order, PA and Ontario, Canada parties, Cal. Dept. Corp. (3/30/04).
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