Cream Group Inc., which operates as Oro Marketing, and its mastermind Sami Charchian have agreed to a permanent ban on telemarketing to settle Federal Trade Commission charges that they targeted Spanish-speaking women with false promises that they could make money reselling brand-name goods, such as Gucci and Ralph Lauren.
The FTC alleged that the California-based defendants charged hundreds of dollars upfront for shoddy, generic products. The settlements require Oro and Sami Charchian to turn most of their assets and prohibit them from deceiving consumers in any future sales pitches.
Oro and its principals, according to the complaint, charged people between $400 and $490 and then shipped them off-brand products instead of the promised brand-name products. Consumers who refused to pay for the products were threatened with arrest, phony lawsuits, referrals to immigration authorities and other intimidating statements.
A U.S. district court judge in December 2013 entered an order temporarily halting Oro's business practices. The judge subsequently granted the FTCs request for a preliminary injunction, appointed a receiver and froze the companys assets pending trial.
One final order imposed a $5.1 million judgment against Cream Group and Sami Charchian, equal to the total revenues of the telemarketing scheme. The judgment will be partially suspended after they have turned over virtually all of their assets to the FTC.
It will become due in full if they are later found to have misrepresented their financial condition. The order further requires the relief defendants to transfer rental properties they own to the court-appointed receiver to sell.
"These defendants preyed on people who were just trying to make an honest living," said Jessica Rich, director of the FTC's Bureau of Consumer Protection. "Consumers are better off now that the defendants are out of the telemarketing business."