Attorney General Cracks Down on Business Opportunity Scams


FOR IMMEDIATE RELEASE:
March 6, 2000

Attorney General J. Joseph Curran., Jr., today joined the Federal Trade Commission, the Department of Justice and law enforcement officials in 28 other states in announcing "Project Biz-illion$," an attack on business opportunity scams that bilk hundreds of thousands of consumers out of tens of millions of dollars.

The FTC, the Department of Justice, state attorneys general and state securities officials, have filed more than 68 cases against fraudulent business opportunity promoters. Many of these promoters use the classified section of daily newspapers and the Internet to peddle pay phone and vending machine routes and work-at-home schemes like medical billing opportunities. These schemes typically promise high earnings, but they rarely pan out as they can cost consumers thousands of dollars.

The ads make promises like these:

"MEDICAL BILLING. Work from Home - Full or Part Time. From $24K to $50K+ per year. Home Computer Required. CALL NOW!"

"OWN PAYPHONES. $10K plus monthly potential!"

"CANDY AND SNACK VENDING - High weekly income potential. Work 6-8 hrs./wk. Secured and guaranteed locations. $7,000 investment required."

"The advertisements offer wildly exaggerated claims of the money you can make with very little time investment," said Attorney General Curran. "But very often the would-be entrepreneur ends up investing thousands of dollars in worthless ventures. The bottom line: if it sounds too good to be true, more often than not it is."

Among the law enforcement actions announced today are six resolved by Curranís Securities Division within the last year. These actions were filed against the following business opportunity sellers that offered or sold business opportunities in Maryland: Transworld Enterprises, Inc., a seller of "ATM" business opportunities from Boca Raton, Florida; Medi Works, Inc., a medical billing business opportunity from Sherman Oaks, California; Americard Dispensing Corp., a Miami, Florida based seller of prepaid phone card vending machines; Allsports Distribution, Inc., a Reisterstown, Maryland seller of sports memorabilia business opportunities; Vend-A-Preneur, Inc., a New Mexico corporation that sold sports memorabilia business opportunities from a principal office in Owings Mills, Maryland; and Western United Services, Inc., a Burbank, California seller of medical billing software business opportunities.

In five of these six Maryland actions, Curranís Securities Division alleged that the sellers made unsubstantiated income or earnings representations to prospective buyers of the business opportunity. Four of the actions resulted in Final Orders to Cease and Desist against the sellers and several sales representatives, who were permanently barred from selling business opportunities in Maryland. Two of the actions resulted in Consent Orders in which the sellers agreed to settle with the Securities Division and comply with the law in the future.

Curran offers these tips for those considering a business opportunity:

The Attorney Generalís Securities Division offers publications with more information on business opportunities. Consumers can call the Division to request copies at (410) 576-7042, or visit the Attorney Generalís website.


Media inquiries: Sean Caine (410) 576-6357
All other inquiries: Dale Cantone (410) 576-6368