A pair of telemarketers, who allegedly raked in more than $50 million over five years selling an alleged fraudulent advance-fee loan over the phone, last week agreed to pay the Federal Trade Commission $3 million to settle federal and state lawsuits against them.
They were Robert J. Demellweek and David Vincent Jensen, who operated the now defunct American Savings Discount Club, also known as the Tungsten Group, out of Portsmouth, VA, and Largo, FL.
They were sued in U.S. District Court for the Eastern District of Virginia in Norfolk, VA, by the FTC and authorities from Virginia, Wisconsin, and North Carolina.
The suit-ending agreement also includes a lifetime ban forbidding them from telemarketing credit-related products or services. It also requires them to post a $500,000 bond with the FTC before re-entering the telemarketing field.
Neither man could be reached for comment Friday.
The FTC said it will use most of the money, $2.5 million, to pay refunds to thousands of people nationwide who over the last five years paid the pair between $30 and $100 as advance fees for a low-interest loans ranging from $500 to $1,500.
Although the FTC did note that the Demellweek and Jensen did provide some $9 million in loans, it said that they were small loans, averaging $500, which the recipients repaid at the rate of $41 a month for 121 months.
But, according to the FTC, most of the people who paid the advance fee were actually signed up in buyer
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