A federal district court in Arizona entered three stipulated orders on February 26, 2019, settling the FTC’s case against the operators of a sham grant scheme known as Premium Grants. The defendants targeted individuals, many of whom are elderly or have disabilities, who sought help with paying personal expenses such as medical bills, home repairs, and debt.
“Callers offering grant money are really scammers trying to rip you off,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “We’re pleased that our case will put these six defendants out of the fake grant business permanently.”
The stipulated orders ban the settling defendants from advertising, marketing, and selling any grant service, and from telemarketing. The orders also impose a $3 million judgment, which is largely suspended based on the settling defendants’ inability to pay. The settling defendant are surrendering nearly all of their assets, totaling approximately $200,000.
According to the FTC’s July 2018 complaint, the defendants charged their victims up-front fees ranging from $295 to $4,995, promising to help secure tens of thousands of dollars in grant money. The defendants’ telemarketers routinely told consumers that, for an additional fee, they could either obtain more grant money or receive the money faster.
These promises were false. The average consumer is unlikely to qualify for, let alone receive, tens of thousands of dollars in grant money to pay for personal expenses. In reality, all that the defendants secured for their customers was more debt. In total, consumers lost at least $3 million to the scheme.
The district court entered three separate court orders settling the FTC’s charges against defendants: 1) Michael De Rosa; 2) Michael Ford Hilliard, Amazing App, LLC, and Hite Media Group, LLC; and 3) Tiffany Hoffman and 2 Unique, LLC. In addition to the monetary judgment, and to banning the settling defendants from grant services and telemarketing, the orders also ban the settling defendants from making false or misleading statements to financial entities, to prevent them from misrepresenting any future business to payment processors and banks.
The orders also prohibit the settling defendants from making misrepresentations or unsubstantiated claims about any product or services, and require them to have competent and reliable evidence to support claims they make about earnings, profits, sales, and the performance or efficacy of any good or service they offer.
The Commission vote approving the three stipulated orders was 5-0. The Phoenix Police Department provided the FTC with significant assistance in this case.
Litigation continues against Premium Business Solutions LLC and Premium Domain Services LLC, both also d/b/a Premium Services, Premium Grants and PremiumGrants.com; Shawn Stumbo; and Jeremy Silvers.
NOTE: Stipulated final orders or injunctions, etc. have the force of law when approved and signed by the District Court judge.
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