International Law

: Misleading Advertising Law

Business Opportunity Scammer's $100,000 Performance Bond

The Federal Trade Commission today announced that it has successfully secured the proceeds of repeat offender Richard Neiswonger's $100,000 performance bond.

Last year, in a civil contempt case brought by the Commission, a U.S. district judge found Neiswonger in contempt for violating the terms of a 1997 permanent injunction by deceptively marketing business opportunities and failing to provide proof of his bond to the Commission, among other things.

Until now, the company that issued the bond had refused to pay the Commission in full.

Case Background

In May 2007, the FTC announced a court order holding Neiswonger in contempt and banning him from telemarketing or selling any type of business opportunity program to consumers.

The civil contempt order, issued by Senior U.S. District Judge Stephen N. Limbaugh of the U.S. District Court for the Eastern District of Missouri, found that Neiswonger, his business partner William S. Reed, and their firm, Asset Protection Group, Inc., had violated the terms of a 1997 permanent injunction obtained by the Commission that:

1) prohibited them from promoting any program through misrepresentations of material facts;

2) prohibited them from promoting any program without disclosing all material facts to consumers; and

3) required written proof of a $100,000 performance bond to the Commission before marketing any program."

Here is the FTC history regarding this Biz Op scammer.

The order from 1997 was part of the FTC's relatively regular business opportunity sweep, this one called Operation Missed Fortune.

"Defendant: S&K Group , Inc.; Medical Recovery Service, Inc.; Richard C. Neiswonger; Shapiro, Kossmeyer & Flom, PC; Carl F. Kossmeyer; Nancy Freeman; and Marc Freeman

Primary Locations: St. Louis and Las Vegas, Nevada (filed in Federal District Court in St. Louis)

Nature of Business: Offered business consultant opportunities in fields of expense reduction, capital acquisition, and medical bill auditing for up to $12,900.

Allegations include false earnings claims, use of phony references. The Missouri Attorney General's office assisted the FTC in this case.

Interesting, a ten year gap between the first offence and the second contempt finding.

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Full post as published by Misleading Advertising Law on June 09, 2008 (boomark / email).