CURRAN JOINS OTHER STATE, FEDERAL LAW ENFORCERS IN FRANCHISE AND BUSINESS OPPORTUNITY SWEEP
Maryland concludes 22 enforcement actions in 2006 as part of Project FAL$E HOPE$

Maryland Attorney General J. Joseph Curran, Jr. announced today that his Office has joined the Federal Trade Commission, the Department of Justice, the United States Postal Inspection Service, and law enforcement agencies from 11 states in a sweep targeting sellers of business opportunities, franchises, and work at home scams. Of the100 law enforcement actions announced today, 22 were brought by the Maryland Attorney General’s Securities Division.

Attorney General Curran stated that “Maryland’s participation in Project FAL$E HOPE$ demonstrates that this office will continue to aggressively enforce Maryland’s investor protection laws, including the laws designed to protect our citizens who purchase franchises and business opportunities.” Curran warned Maryland citizens to be cautious before investing their money in any business opportunity.

Curran’s actions include consent orders, settlement agreements, orders to show cause, and a final order to cease and desist. The Maryland actions alleged among other things, that sellers violated registration requirements, misrepresented a material aspect of their franchise or business opportunity, or made unlawful earnings claims to buyers to entice them to buy a franchise or business opportunity.

In one Maryland action, the Securities Division of the Maryland Attorney General’s Office issued a Final Order to Cease and Desist against Florida-based Coffee Heaven, LLC and James "Jay" Cummings in connection with their sale of a coffee vending machine business opportunity. According to the Securities Division’s order, Coffee Heaven and Cummings represented that buyers could expect a 300% to 700% return on their investment. At least one Maryland resident paid more than $30,000 for the Coffee Heaven business opportunity after the company gave him materials stating that he could realize a net income of more than $89,000 a year. Coffee Heaven misrepresented to buyers the cost for each cup of coffee, did not register the business opportunity as required by Maryland’s Business Opportunity Act, and did not give the Maryland buyer the required disclosure statement before selling him the business opportunity.

A complete list of the federal and state actions announced today as part of Project FAL$E HOPE$, including the actions announced by the Maryland Attorney General, can be found at www.ftc.gov/os/2006/12/StateEnforcementActions.pdf

According to Curran, “In many cases the best protection against business opportunity fraud we can offer is to suggest you call us before investing in any business venture.” The Securities Division can be reached at (410) 576-6360, or visit our website at www.oag.state.md.us/securities