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Wednesday, October 4, 2000
CORNYN CRACKS DOWN ON FRAUDULENT TELEMARKETERS IN HOUSTON
Court orders bogus businesses to stop operating
AUSTIN - Texas Attorney General John Cornyn and Harris County Attorney Michael Fleming today announced a lawsuit filed against four individuals operating a fraudulent telemarketing operation out of Houston. John Gilbert Robinson, Nathaniel Peace, and Bruce Lynn Middleton and Cedaniel Middleton, have been soliciting payments from hundreds of businesses nationwide for bogus advertisements in non-existent law enforcement publications.
The State obtained a temporary restraining order forbidding Robinson, Peace and Bruce and Cedaniel Middleton from conducting any business until they are in compliance with Texas law. The temporary restraining order also freezes the defendants' personal and business assets. The lawsuit itself seeks fines, penalties, attorney's costs and restitution to the injured customers. The temporary restraining order was signed today by Judge Tracy Christopher in the 295th District Court in Houston.
"This is the third lawsuit of its type my office has filed in recent months. If you operate an illegal business and take advantage of consumers, you will pay the price,"said Attorney General Cornyn. "These lawsuits send the message that no one is above the law."
The operations have several people working for them who call primarily out-of-state companies seeking money for law enforcement magazine advertisements. The defendants have used a variety of assumed names for their publications that imply affiliation with state troopers, sheriffs, and police. Currently, there are nine known publications for which the defendants solicit advertisements. Some of the non-existent publications they use are The State Police Journal, State Police Enforcers Journal, Police Enforcers Journal and the Trooper Yearbook.
When consumers are called, they are told that any money received will go to educate the public on crime and to help keep children off of drugs. Sometimes consumers are told that any money received will benefit family members of slain law enforcement officers. The defendants' team of telemarketers typically inform businesses that payment for an advertisement has been authorized when, in fact, no previous authorization exists. "Invoices" are also sent to businesses indicating that the advertisements were approved.
Additionally, businesses receive harassing phone calls from the operation's telemarketers regarding the ads and later pay the false invoices that range from $100 to $600 per advertisement, per publication.
None of the money received by the defendants from U.S. businesses goes to charity, but is instead spent by the defendants.
None of the defendants are registered as public safety publications or as telemarketers as required by Texas law. Those operating a public safety entity or publication must be in compliance with the Texas Occupations Code which requires such organizations to file a registration statement and fee with the Texas Secretary of State. The organizations must also make required disclosures to their contributors and advertisers and have each of its solicitors file a registration statement and a bond.
This case was handled by Assistant Attorney General John Owens of the Consumer Protection Division in Houston.
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Contact Mark Heckmann, Heather Browne, or Tom Kelley at (512) 463-2050
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