The Feds strike again. This time mopping up more shit in the Industry. The Federal Trade Commission won a court judgment against the marketers of three get-rich-quick systems who deceived nearly a million consumers. As part of its ongoing efforts to stop scams that prey upon financially distressed consumers, the FTC is seeking more than $450 million in monetary relief.

On April 20, 2012, Federal District Judge Jacqueline H. Nguyen, of the U.S. District Court for the Central District of California, granted the FTC’s request for summary judgment and asked the agency and defendants to submit arguments on the appropriate remedy for the violations. The marketers are behind the infomercials for “John Beck’s Free & Clear Real Estate System,” “John Alexander’s Real Estate Riches in 14 Days,” and “Jeff Paul’s Shortcuts to Internet Millions.” The court found that the infomercials misled consumers in violation of the FTC Act, and that despite the marketers’ easy-money claims for the systems, which cost $39.95 each, nearly all the consumers who bought them lost money.

It seems like it was really nasty on the back-end:

Consumers who purchased the systems were automatically enrolled in continuity programs that charged recurring fees and cost an extra $39.95 per month. The court found that the defendants failed to adequately disclose that consumers who purchased the systems would be enrolled in the continuity plans and submitted consumers’ payment information without their express informed consent, in violation of the FTC Act and the Telemarketing Sales Rule (TSR).

In addition, the defendants offered personal coaching services, which cost up to $14,995, to consumers who purchased any of the three systems. The court found that, contrary to the defendants’ claims that consumers would quickly and easily earn back the cost of the coaching program and that the coaching would substantially enhance consumers’ chances of making money, almost all consumers who purchased coaching programs lost money. The telemarketers also violated the TSR by repeatedly calling consumers who previously asked the defendants not to contact them.

$450 Million. That’s no fucking around! My question is how did it go on as long as it did? I mean $450 Million it seems to me  this was pre-meditated to the point of allowing it to go on until a questionable sum would be enough to seek? Just thinking out loud here..

The court found John Beck Amazing Profits LLC, John Alexander LLC, Jeff Paul LLC, Family Products LLC, and Mentoring of America LLC liable for the misrepresentations in the infomercials and those made by the defendants’ telemarketers. Gary Hewitt and Douglas Gravink were found to have controlled each of the corporate defendants and to be liable for injunctive and monetary relief. In addition, Beck, Alexander, and Paul were found liable for the misrepresentations concerning their own systems because they participated directly in the deceptive advertising, knew that the infomercials made material misrepresentations, “or at least were recklessly indifferent to the truth or falsity of the infomercials.”

Ralph Ruckman

Founder & Entrepreneur at IMGrind & Mobgrind, Revived Media (our Mobile CPA Network) and iMobitrax (our Proprietary Mobile Tracker). I dedicate myself inside our Private Internet Marketing Forums teaching Entrepreneurs how to be successful with their businesses. Connect socially with me: