The Federal Trade Commission won a $29.8 million judgment against defendants behind a deceptive marketing operation known as Grant Connect.
The U.S. District Court for Nevada's order announced Monday permanently bans the defendants from promoting products and services similar to those they deceptively pitched to consumers around the country.
The FTC charged the defendants with deceiving consumers by making misleading and unsubstantiated claims about bogus products and services, including one that supposedly would help them get free government grants.
The defendants in the case include: 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.
The court found that the defendants marketed their grant products, including Grant Connect, using pictures of President Obama and the American flag to bolster the impression that billions of dollars in free government grants were available quickly and easily for personal needs.
The court also found that the defendants: 1) deceptively marketed dietary supplements using claims unsupported by scientific research; 2) failed to adequately disclose that their credit offers were merely memberships to a shopping club; 3) made unsupported claims that consumers could earn thousands of dollars per month with a work-from-home business opportunity; 4) failed to adequately disclose that consumers who bought their products or services would be enrolled in continuity plans with significant monthly fees, often for a variety of unrelated products; 5) used fake testimonials to promote their products; and 6) debited consumers' bank accounts on a recurring basis without obtaining consumers' permission.
The court order specifically bans the remaining defendants from marketing or selling:
* grant-related products and services;
* credit-related products;
* work-from-home and business opportunities; and
* dietary supplements and nutraceuticals.
It also bans the defendants from using:
* continuity programs and negative option marketing, in which consumers have to opt out of receiving products to prevent being charged on a recurring basis;
* testimonials in connection with any product or service; and
* preauthorized electronic fund transfers that charge consumers' debit accounts.
Earlier this year, the FTC settled similar charges against several other defendants in the case.
Under those settlements, Juliette Kimoto, Johnnie Smith, and four companies Kimoto owned were barred from marketing certain products and services similar to those that they allegedly offered to consumers (
