Ken Paxton

Tuesday, February 22, 2005

Attorney General Abbott Files Three Actions In Support Of Operation Biz Opp Flop Sweep

AUSTIN - Texas Attorney General Greg Abbott today announced the filing of three legal actions in support of a nationwide roundup targeting the operators of fraudulent business opportunities and work-at-home schemes.

The Texas actions are part of a nationwide enforcement sweep involving the Federal Trade Commission, the Department of Justice, the U.S. Postal Inspection Service and 14 states.

Called Operation Biz Opp Flop, the coalition is charging more than 130 fraudulent operations with violating various consumer protection laws, including cases in Texas that have resulted in a contempt filing against a wedding career consultant and a suit alleging misrepresentations by a company selling online business software and service packages.

Click here to view information regarding Business Opportunity Scams

Get-rich-quick schemes and false promises plague Texas consumers, and I am proud to participate in this wide-ranging effort to eradicate them, said Attorney General Abbott. I am determined to stop scam operators who ruthlessly exploit well-meaning consumers, and I will make every effort to get money back for those who were wronged.

Attorney General Abbott filed a lawsuit today in Bexar County District Court against Delaware corporation iMergent Inc., which does business as, and sued its officers, Brandon Lewis and Donald Danks.

Formerly known as Galaxy Mall Inc., spokespersons claim in hotel seminars and training sessions held in cities across Texas that its software and services will enable a consumer to set up successful Web sites and sell various products or services at a large profit. The company promises a profit return of far more than the initial $500 fee for the Web package, as well as support and mentoring.

However, after interested consumers have set up the Web site, the defendants then approach them with an offer of expert technical assistance, which costs an additional $4,000 or more. Consumers who complained to the Attorney General about said they were led to believe the expert technical assistance was part of the $500 startup fee.

Others complained the software they purchased was faulty or that consumers who visited their Web sites could not purchase the items, resulting in many lost sales. The Attorney General will seek injunctions prohibiting this conduct, as well as restitution to consumers, civil penalties and attorneys’ fees.

Attorney General Abbott also filed a contempt motion against Patricia G. Thomas of Houston and her Wedding Careers Institute Inc. and Wedding Careers Worldwide Association, L.L.C. Thomas has continued to operate in flagrant violation of state laws and a court’s permanent injunction, placing her in possible contempt.

She was sued by the Attorney General in late 2003 for making false promises about the value of her wedding career instruction courses, which cost consumers at least $800 each. The Texas Workforce Commission investigated Thomas’s activities from early 1999, finally denying her a certificate of approval to operate as a licensed proprietary school. Nonetheless, Thomas continued to advertise her instructional services on the companies’ Web sites as if licensed.

The Attorney General reached an agreement with Lady of America Franchise Corp. of Fort Lauderdale, Fla., which sells fitness center franchises in Texas and other states. The company has agreed to stop telling prospective franchisees they are not required to register and post a security bond with the state to protect consumer members.

Several fitness centers and health spas in Texas have been under investigation the past year, and Attorney General Abbott’s office has resolved several of these through legal actions, including court orders for the return of consumers’ money paid in advance as membership fees.

Operation Biz Opp Flop will continue today in several states to include not only civil actions such as these in Texas, but criminal prosecutions against organized fraud artists.

Attorney General Abbott added, Consumers should avoid businesses that promise big money for little effort or risk, or those that do not divulge important information about their services. The age-old warning that if it sounds too good to be true, it probably is,’ still holds true today.

Attorney General's lawsuit against iMERGENT, Inc.

Attorney General's motion for contempt against Wedding Careers Institute

Attorney General's agreement with Lady of America Franchise Corporation