The Federal Trade Commission has halted a telemarketing and Web operation that purported to sell coffee display rack franchises. The scammers offered display racks and location assistance in return for payments that ranged from $18,000 to $85,000.
The FTC named USA Beverages, Inc,; Dilraj Mathauda, also known as “Dan Reynolds;” Sirtaj Mathauda; Jeff Pearson, also known as “Paul Clayton”; David Mead; and Silvio Carrano as defendants. Their activities were halted by the U.S. District Court for the Southern District of Florida. The court additionally issued a temporary restraining order, froze their assets, and appointed a receiver.
According to the FTC, the salespeople offering the franchises for the defendants falsely claimed that consumers would make no less than $1,055.60 per week if they operated a 13-display rack venture. As part of the sales pitch, representatives assured consumers that numerous retail locations were already lined up in their local area, another claim the FTC alleged was untrue. “Satisfied purchasers” references were shills, paid by the company for endorsements, who used prepaid cell phones to make it appear purchasers were operating successful coffee display routes throughout the United States.
In fact, the defendants made wide use Voice over Internet Protocol services to make it seem as if they were operating out of New Mexico, as they claimed. In fact, they were based in Costa Rica.
