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NEWARK
– The Office of the Attorney General
and the Division of Consumer Affairs have
filed suit against a Mendham-based work-at-home
company and its principal, alleging that
they defrauded consumers through offers
to earn income by stuffing envelopes or
assembling booklets.
The
state’s lawsuit is part of “Operation
Empty Promises,” a nationwide crackdown
against work-at-home scams announced today.
Operation Empty Promises is a multi-agency
law enforcement initiative which includes
ten FTC actions, forty-eight criminal actions
by the Department of Justice (many of which
involved the assistance of the U.S. Postal
Inspection Service), seven additional civil
actions by the Postal Inspection Service,
and twenty-six actions by state law enforcement
agencies.
The
state’s five-count Complaint, filed
in State Superior Court in Essex County,
alleges that David S. Brookman, 40, and
his company, Capital Enterprises, Inc.,
violated the state Consumer Fraud Act and
Advertising Regulations through bait-and-switch
tactics in advertisements that stated consumers
could earn “up to $5,000 or more weekly”
by stuffing envelopes and mailing letters,
and “$2,500 or more weekly”
by assembling booklets.
The
state alleges that after consumers paid
registration fees to Brookman and Capital
Enterprises, defendants then changed the
terms and conditions of their work-at-home
programs to require additional undisclosed
payments and fees. Capital Enterprises does
business as Maxwell Scott Enterprises, Maxwell
Scott, David Gates Enterprises, and Warner
Daniel. The state’s Complaint alleges
that David Gates is an alias used by Brookman.
“Roadside
utility poles across New Jersey are covered
with offers to earn money while working
at home. These offers sound too good to
be true, and as our investigation and others
across the country found, they often are
scams that only enrich the con artists who
perpetrate them,” Attorney General
Paula T. Dow said.
The
state is seeking restitution for consumers,
along with imposition of civil penalties
and reimbursement of attorneys’ fees
and costs and defendants’ compliance
with the state’s consumer protection
laws and regulations.
The
lawsuit, which is being transferred to State
Superior Court in Morris County, alleges
that the defendants engaged in unconscionable
commercial practices and used deception,
false pretenses, false promises and misrepresentations
to defraud consumers. The defendants allegedly
also knowingly omitted material facts when
soliciting consumers and engaged in bait-and-switch
tactics.
For
example, the defendants allegedly failed
to disclose to consumers prior to their
payment of the registration fee for the
booklet assembly work-at-home program that
the stated income potential for assembling
booklets only applied if the consumer, at
his or her own expense, advertised and marketed
the very booklets they were to assemble.
“Consumers
caught in the current economic downturn
are particularly vulnerable to supposed
money-making opportunities, such as the
work-at-home scheme alleged in this case,”
said Thomas R. Calcagni, Acting Director
of the State Division of Consumer Affairs.
“The consumers ended up worse off,
with money out of their pockets that ended
up in Brookman’s wallet. We’re
committed to stopping scam artists who perpetrate
work-at-home schemes from preying on New
Jersey residents.”
Consumers
can file complaints with the Division of
Consumer Affairs by using the forms available
at www.njconsumeraffairs.gov
or by calling 1-800-242-5846
(toll-free within N.J.) or 973-504-6200.
Deputy
Attorney General Jah-Juin Ho in the Consumer
Fraud Prosecution Section is representing
the state in this action. Investigator Kelly
Fennell in the Office of Consumer Protection
conducted the investigation.
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