Federal Court Prohibits Three Defendants from ‘Cramming’
Unauthorized Charges on Consumers’ Telephone Bills
Three
individuals have agreed to settle Federal Trade Commission charges for
their role in a massive scam that billed more than $34 million in
unauthorized collect call charges to millions of consumers throughout
the country.
Yaret Garcia, Erika Riaboukha, and
Qaadir Kaid led three companies, collectively known as Nationwide,
which billed consumers for nonexistent collect calls for more than two
and a half years. In February 2006, the FTC charged them, their
companies, and two other persons with unfair and deceptive billing in
violation of the FTC Act. A federal judge halted the operation with a
temporary restraining order, appointed a temporary receiver over
Nationwide, froze the defendants’ assets, and barred them from engaging
in unauthorized billing. The court continued this relief in a
preliminary injunction order issued in March 2007.
In December 2007, the court entered a default judgment of more than $34
million against Nationwide, which the receiver is winding down. The FTC
has settled its claims against the other defendants – Nationwide’s
ringleader, Willoughby Farr, and his mother, Mary Lou Farr (see press
releases dated March 8, 2008, and October 25, 2007).
The FTC also sued the billing aggregators – BSG Clearing Solutions
North America, LLC, Billing Concepts, Inc., and ACI Billing Services,
d/b/a OAN (collectively, BSG) and The Billing Resource, d/b/a
Integretel – that billed and responded to complaints on behalf of
Nationwide through their contracts with local phone companies (see
press release dated October 10, 2006). In a stipulated final judgment
entered in March 2008, the court barred BSG from, among other things,
billing consumers for unauthorized telecommunications charges, and
ordered it to pay $1.9 million to the FTC (see press release dated
March 13, 2008). The case against Integretel is still pending.
The settlements announced today include monetary judgments of more than
$34.5 million against Garcia and Riaboukha and a $75,000 judgment
against Kaid. The settlements require Garcia and Riaboukha to surrender
to the FTC all of the funds in their bank accounts and will result in
the FTC receiving approximately $12,000 from Riaboukha and
approximately $75,000 from Kaid and Garcia. Upon payment of these
amounts, the judgments
-more-
(NationwideConnectionsGarcia - 4/14/08)
against
Garcia and Riaboukha will be suspended based on their inability to pay
more. The full judgments against them will be imposed if they are found
to have misrepresented their financial condition.
The stipulated orders bar all three defendants from unauthorized
telephone billing and from selling or renting consumers’ personal
information obtained from Nationwide. The settlement with Kaid also
bars him from being an officer or director of any business unless he
controls, participates in, or knows about its daily operations. The
settlements contain standard record-keeping provisions to allow the FTC
to monitor compliance with the orders.
The
Commission vote to authorize staff to file the stipulated final orders
was 5-0. They were filed in the U.S. District Court for the Southern
District of Florida.
NOTE: These
stipulated final orders are for settlement purposes only and do not
constitute an admission by the defendant of a law violation. A
stipulated final order requires approval by the court and has the force
of law when signed by the judge.
The FTC works for
the consumer to prevent fraudulent, deceptive, and unfair business
practices and to provide information to help spot, stop, and avoid
them. To file a complaint in English or Spanish, click http://www.ftc.gov/ftc/complaint.shtm
or call 1-877-382-4357. The FTC enters Internet, telemarketing,
identity theft, and other fraud-related complaints into Consumer
Sentinel, a secure, online database available to more than 1,600 civil
and criminal law enforcement agencies in the U.S. and abroad. For free
information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.
- MEDIA CONTACT:
- Frank Dorman
Office of Public Affairs
202-326-2674
- STAFF CONTACT:
- Laura Kim
Bureau of Consumer Protection
202-326-3734
