BULLETIN: The Federal Trade Commission has gone to federal court in Fort Myers to seek contempt sanctions against Florida companies accused of encouraging prospects to misrepresent information on applications to receive Food Stamp benefits.
Prospects who followed the advice could be charged with a crime, the FTC said.
The companies and their principal also are accused of violating a March 2010 court order that prohibited them from marketing credit-repair and debt-elimination programs deceptively. Named in the contempt petition are Sam Tarad Sky, Allrepco LLC, Credit Restoration Brokers LLC (CRB), and Debt Negotiations Associates LLC.
“In violation of the Stipulated Settlement Order, Contempt Defendants Sam Sky and
his companies have launched a scheme to defraud economically distressed consumers who
may be interested in receiving food stamps,” the FTC charged. “Specifically, taking cynical advantage of the recent economic downturn, Sky and his companies deceptively market a ‘Food Stamp Eligibility Tool Kit’ . . . to consumers seeking financial help. Sky and his companies market the product as an ‘automatic,’ ‘hassle free’ method by which ‘virtually
everyone’ can receive food stamps ‘without any risk.’
“In fact,” the FTC continued, “eligibility for food stamps remains strictly limited and the vast majority of Americans do not qualify. To side-step these longstanding limitations, Sky’s ‘guide’ encourages consumers to provide so-called ‘ideal’ information on their food stamp applications thereby misrepresenting their income and expenses. Following such advice is hardly ‘without any risk.’ Rather, it puts consumers at considerable risk of criminal prosecution for public benefits fraud. Finally, Contempt Defendants also violate the Stipulated Settlement Order by unlawfully requiring payment before performance for credit repair services and refusing to make required disclosures about the timing and risk of debt negotiation.”
Today’s filing is rich with coincidences. For one, one of the accused firms — Debt Negotiations Associates — uses the acronym DNA. The DNA acronym also has been used by a separate, unrelated company known as Data Network Affiliates, which also operates in Florida. Data Network Affiliates offered a purported debt-reduction program tied to purported mortgage re-writes, while at once advising prospects it was in the business of gathering data to help the AMBER Alert program rescue abducted children.
Data Network Affiliates, which is associated with Internet Marketer Phil Piccolo, later appears to have morphed into a company known as OWOW, which offered purported cancer cures and a “magnetic” product purported to have prevented a leg amputation. The purported “magnetic” product also was positioned as a device that could help tomatoes grow to twice their ordinary size and dairy cows produce more milk.
In another rich coincidence, promoters of a Florida company known as MPB Today targeted Food Stamp recipients last year in promos that implied Food Stamp money could be used to join the MPB Today MLM program and that a $200, one-time purchase could result in free groceries for life.
One promo for MPB Today even advised prospects to sell $200 worth of Food Stamps to a family member to raise the cash to join the MPB Today program. The promo, which appeared in the form of a news release, purported to be the byproduct of a thought that had popped into the promoter’s head on a drive home from “church” on a “beautiful Sunday afternoon.”
The U.S. Department of Agriculture said last year that it was investigating certain claims about the MPB Today program.
Read the extraordinary allegations outlined in the FTC’s contempt petition against Sam Tarad Sky, Allrepco LLC, Credit Restoration Brokers LLC (CRB), and Debt Negotiations Associates LLC.
Among the allegations was that Sky had started a “new ficitious business” known as “Florida Consumer Assistance” to hawk the purported Food Stamp guide. The new scheme also featured the creation of a website known as MyFoodStampCard.com, according to the FTC.
The website, which is still active, appears to make a series of political statements. Under a subhead of “THE SICKENING STIGMA,” for instance, the site says this:
“The sickening stigma – most all of us grew up in a time where our parents and grandparents – worked hard – never took a hand out and wouldn’t ever let their credit go bad, or even miss a house payment! This is not the same America – ‘Political Greed is destroying our children’s future’ and our retirement opportunities.
“If you 100% disagree with the previous sentence – then leave this website now.” the site barks.
“Good people need to wake up!” the site continues. “Good people have lost their homes and lost their savings trying to do the ‘right thing’ – but what they didn’t understand is the ‘right thing’ is really now the wrong thing. Back in the day, doing the ‘right thing’ would’ve NEVER put good people in the positions that they’re in today.”
The site eventually asks for “1 Easy Payment Of $99.95,” instructing prospects that “You do not have to pay a private social worker $599 to give you assistance.”
