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… Navestad and Maspakorn, operating primarily as the “Cash Grant Institute,” made more than eight million robocalls to consumers, including more than 2.7 million calls to phone numbers on the National Do Not Call Registry. These calls falsely claimed that “cash grants” for consumers were readily available from federal, state, and local governments, private foundations, and “wealthy individuals.” The calls promised consumers that they had already qualified for these “grants,” and that they could receive up to $25,000 to overcome personal financial problems.
Washington
FTC Case Against Deceptive Robocallers Leads To Record $30 Million In Civil Penalties
Cash Grant Institute Called Consumers on the Do Not Call Registry, Promised Cash Grants That Didn’t Exist
April 2, 2012
In response to charges by the Federal Trade Commission, a federal judge has ordered the defendants behind a deceptive robocall scheme to pay a total of $30 million in civil penalties and give up more than $1.1 million in ill-gotten gains for violations of the FTC Act and the Telemarketing Sales Rule. The court order includes a $20 million judgment against Paul Navestad, which is the largest civil penalty against a defendant in an FTC case, and a $10 million judgment against Christine Maspakorn. The $30 million in total fines is, by far, the largest penalty ever imposed for unlawful calls to consumers on the Do-Not-Call Registry.
According to a Decision and Order issued March 23, 2012 by the U.S. District Court for the Western District of New York, Navestad and Maspakorn, operating primarily as the “Cash Grant Institute,” made more than eight million robocalls to consumers, including more than 2.7 million calls to phone numbers on the National Do Not Call Registry. These calls falsely claimed that “cash grants” for consumers were readily available from federal, state, and local governments, private foundations, and “wealthy individuals.” The calls promised consumers that they had already qualified for these “grants,” and that they could receive up to $25,000 to overcome personal financial problems.
The robocalls directed interested consumers to one of Navestad and Maspakorn’s websites, requestagrant.com, which repeated many of the same deceptive claims about the availability of “Free Grant Money.” Another of the defendants’ websites, cashgrantsearch.com, declared that it was the “Source of Free Money from the Government.” It contained pictures of the U.S. Capitol Building and President Obama, and stated, “Did you know that grant money exists for almost any purpose and does not need to be repaid?”
Yet as the FTC demonstrated to the court, government grant money does not exist for almost any purpose, and none of the defendants’ websites actually provided grants. Instead, they merely referred consumers to other grant-related websites that charged a fee for providing general information about how to obtain grants from public or private sources. It was only after consumers had paid the fee that they learned that it was very difficult to obtain cash grants from public or private sources, that very few people qualified for such grants, and that obtaining a grant involves a lengthy, competitive application process.
The FTC filed the case in July 2009 as part of the FTC’s ongoing crackdown on schemes that prey on financially strapped consumers. Shortly after filing, the court halted the defendants’ operation, froze their assets, and appointed a receiver to oversee the business pending litigation.
Navestad and Maspakorn then asserted their Fifth Amendment rights and refused to testify or turn over evidence. Through his attorney, however, Navestad contested the charges, claiming that he was merely a “consultant” for the companies engaged in the deceptive scheme. U.S. District Court Judge Michael Telesca rejected Navestad’s claims and held that the FTC had “submitted copious amounts of evidence” – including 120 exhibits consisting of bank records, contracts, witness statements, depositions correspondence, and photographs – “supporting each and every element” of its case against Navestad and Maspakorn. Judge Telesca then issued orders permanently banning the defendants from marketing grants, grant-procurement goods or services, and credit-related products; from misrepresenting any good or service; and from violating the Telemarketing Sales Rule in any fashion in the future. In addition, the court orders bar the defendants from selling or otherwise benefitting from customers’ personal information, and require them to properly dispose of customers’ personal information within 30 days.
The defendants are Paul Navestad, also known as Paul Richard, and Chintana Maspakorn, also known as Christina Maspakorn, both doing business as, among others, The Cash Grant Institute, Global Ad Agency, Global Advertising Agency, Domain Leasing Company, and/or Cash Grant Search.
For more information on how to avoid scams, read Who’s Calling? Recognize and Report Phone Fraud and Government Grant Telemarketing Scams.