For
Release: March 3,
2004
Miami-Based
Vending Machine Franchisors Banned from Marketing Business
Ventures
Defendants Were Part of “Operation Busted Opportunity”
Sweep
The Federal Trade Commission has accepted two separate settlements
with the operators of a bogus business opportunity venture.
In separate settlements, one settlement with Jesse Alper and
the other settlement with Inspired Ventures, Inc., Victor
Alper, I.V.I. Management Corporation, and Source Systems,
Inc., the defendants are banned from marketing business ventures
and from telemarketing. The FTC alleged that the defendants,
based in Miami, engaged in deceptive business practices in
the sale of their vending machines. I.V.I. Management managed
the advertising for the scheme, and Source Systems supplied
the bulk candy for the vending machines.
The FTC’s complaint against the defendants
was filed in June 2002, as part of “Operation Busted
Opportunity” – a coordinated attack on business
opportunities and work-at-home fraud by the FTC, the Department
of Justice (DOJ), and 17 state law enforcement agencies. According
to the complaint, the defendants advertised their candy vending
machines, called “Sweet Tooth Sam, the Money Making
Man,” on the Internet, in newspaper ads, and by telephone.
The ads contained statements that prospective buyers would
receive “500% Profits” or “$4000 per month.”
In addition, the defendants allegedly directed consumers to
call “shill” references. According to the FTC,
the defendants’ references posed as regular consumers
and assured callers, with fabricated stories, that Inspired
Ventures was a legitimate and profitable business opportunity.
The FTC alleged that the defendants’ earnings claims
were false and that consumers did not achieve the promised
profits, but instead lost thousands of dollars. The smallest
Inspired Ventures package consisted of 30 machines, candy,
shipping, and locating fees, and required an upfront fee of
approximately $14,000. Larger plans included 100 machines,
costing up to $30,000.
In separate proposed stipulated final judgment
and orders, all of the defendants are banned from marketing
business ventures and from telemarketing. The settlements
also prohibit the defendants from making false or deceptive
statements and from selling their customer lists. In addition,
the orders require that all frozen funds of the corporate
defendants be paid to the FTC and include an avalanche clause
that will trigger a $2,653,969 judgment if it is found that
the defendants materially misrepresented their financial conditions.
The Commission vote authorizing staff to
file the two stipulated final judgments and orders was 5-0.
The stipulated final judgments were filed in the U.S. District
Court, Southern District of Florida, Miami Division, and entered
by the court on February 24, 2004.
NOTE: These stipulated
final judgments are for settlement purposes only and do not
constitute an admission by the defendants of a law violation.
Stipulated final judgments have the force of law when signed
by the judge.
Copies
of the two stipulated final judgment and orders are available
from the FTC’s Web site at http://www.ftc.gov
and also from the FTC’s Consumer Response Center, Room
130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.
The FTC works for the consumer to prevent fraudulent, deceptive,
and unfair business practices in the marketplace and to provide
information to help consumers spot, stop, and avoid them.
To file a complaint, or to get free information on any of
150 consumer topics, call toll-free, 1-877-FTC-HELP (1 877-382-4357),
or use the complaint form at http://www.ftc.gov.
The FTC enters Internet, telemarketing, identity theft, and
other fraud-related complaints into Consumer Sentinel, a secure,
online database available to hundreds of civil and criminal
law enforcement agencies in the U.S. and abroad.
MEDIA CONTACT:
Brenda Mack,
Office of Public Affairs
202-326-2182
STAFF CONTACT:
James Kohm or Michelle Grajales
Bureau of Consumer Protection
202-326-2640 or 202-326-3172
(FTC Matter No. X020067)
(Civil Action No. 02-CV-21760)
(http://www.ftc.gov/opa/2004/03/ventures.htm)
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Related Documents:
Federal Trade Commission,
v. Inspired Ventures, Inc., a Florida Corporation; I.V.I.
Management Corp., a Florida Corporation; Source Systems, Inc.,
a Florida Corporation; Jesse Alper, Individually and as an
Officer or Director; and Victor Alper, Individually and as
an Officer or Director, Defendants, United States
District Court Southern District of Florida Miami Division,
Case No. 02-21760-CIV-Jordan
- Stipulated
Final Judgment and Order for Permanent Injunction and
Other Equitable Relief as to Defendants Inspired Ventures,
Inc., I.V.I. Management Corp., Source Systems, Inc., and
Victor Alper
- Stipulated
Final Judgment and Order for Permanent Injunction and
Other Equitable Relief as to Defendant Jesse Alper
Consumer Information:
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