The Federal Trade Commission stopped an operation that allegedly deceived consumers with misleading and unsubstantiated claims about bogus products and services, including one that supposedly would help them get free government grants and another pitching sham products - including credit cards.
Several defendants behind the “Grant Connect” program have agreed to a permanent bar from marketing products and services like those that they pitched to unwary consumers.
Juliette Kimoto, Johnnie Smith, and other defendants behind Grant Connect used pictures of President Obama, Vice President Biden and the American flag to bolster claims that their bogus government grants service was affiliated with the U.S. government, according to the FTC's complaint.
They failed to adequately disclose that their credit offers were merely memberships to a costly shopping club and promoted a dietary supplement by falsely claiming that it was endorsed by Oprah Winfrey and supported by scientific research.
The FTC’s complaint charges that the defendants failed to adequately disclose that consumers who bought their products or services would be enrolled in continuity plans with significant monthly fees, mainly for other unrelated products. It also alleges the defendants used fake testimonials to promote their products and debited consumers’ bank accounts on a recurring basis without consumers’ permission.
The settlements with Kimoto, Smith, and four companies Kimoto owned permanently bar the defendants from marketing products and services similar to those that they allegedly used to deceive consumers. The settlements also impose a $29.9 million judgment against them, which will be suspended upon payment of specified amounts detailed below.
The first settlement order announced Monday bans defendant Smith from marketing or selling grant-related products or services, credit-related products, work-at-home business opportunities, weight-loss related dietary supplements and other products or services using a “negative-option” or continuity program in which consumers are billed automatically until they decide to cancel.
Smith also is banned from assisting anyone else selling these programs or products and from taking customer payments using pre-approved electronic fund transfers. Finally, Smith is banned from using testimonials to sell products or services, and is subject to the monetary judgment, under which he will pay $45,000.
The second settlement order bans Kimoto and four companies she owned from: selling grant-related products or services, credit-related products, or work-at-home business opportunities; selling products or services with a continuity or negative-option program; taking consumer payments by preauthorized electronic funds transfer; assisting others engaged in these activities; and using testimonials.
The second settlement order also bans the four companies from marketing dietary supplements claimed to assist in weight loss or other specified outcomes, and prohibits Kimoto from making misleading health claims related to dietary supplements.
The order also requires Kimoto to pay more than $90,000 and to turn over various personal assets, including jewelry, a piano, and a 1967 Chevy Camaro, along with all the cash and other assets held by the entities she owned. The total value of the cash and assets turned over by Kimoto and the companies she owned exceeds $220,000.
Litigation continues against Kyle Kimoto, Michael Henriksen; Steven R. Henriksen; Tasha Jn Paul; Rachel A. Cook; James J. Gray; Randy D. O’Connell; Acai, Inc.; Allclear Communications, Inc.; Consolidated Merchant Solutions, LLC; Dragon Group, Inc.; Elite Benefits, Inc.; Global Fulfillment, Inc.; Global Gold, Inc.; Global Gold Limited; Grant Connect, LLC; Healthy Allure, Inc.; Horizon Holdings, LLC; MSC Online, Inc.; O'Connell Gray, LLC; OS Marketing Group, LLC; Paid To Process, Inc.; Premier Plus Member, Inc.; Total Health, Inc.; and Vcomm, Inc.
