A federal district court has approved a permanent injunction and $4 million fine against Biosource Financial, Inc., Gordon Levoy and Jason C. Williams — alleged operators of fraudulent telemarketing boiler rooms.
In April 2002, the FTC filed a complaint in U.S. district court in Illinois against Consumer Alliance Inc., a Delaware Corp.; Consumer Alliance Inc. (also known as 1421914 Ontario Inc.), a Canadian Corp.; and BioSource Financial Inc.
The FTC also named Steven Winter, Gordon Levoy, Jason C. Williams, and Danny Longo. The three companies operated as a single enterprise out of Toronto and other locations in central Ontario.
According to the FTC, the defendants operated telemarketing boiler rooms selling bogus credit card protection services and advance-fee credit cards exclusively to U.S. consumers. The FTC stated they used ‘scare tactics and blatant lies’ to convince consumers they faced unlimited liability for unauthorized charges on their credit cards if the cards were stolen or lost.
The defendants also targeted senior citizens, charging their victims $299 to $349 and typically telling consumers they were affiliated with VISA, MasterCard, or the consumer’s credit card issuer, the FTC continued.
In other calls, the defendants promised U.S. consumers a low-interest credit card or a low interest rate on the consumer’s existing credit card, for $349 or $399. At most, those consumers only received a list of banks to which they could apply for credit cards, according to the FTC.
Last June, the FTC said that Canadian officials obtained a criminal plea agreement, including a total fine of $550,000 (Canadian) from Biosource, Levoy, Williams, and Longo. Shortly thereafter, the FTC obtained a summary judgment as to liability against all the defendants.
In October 2003, the court issued a permanent injunction. The court permanently enjoined all defendants from telemarketing of any kind to U.S. consumers, selling credit card protection or any other credit-related products by any means, and misrepresenting any material fact in the sale of any product. In January, the court entered a monetary judgment in the FTC’s favor against the Consumer Alliance defendants, including Steven Winter, in the amount of $4,011,510 (U.S.)
The defendants admitted no wrongdoing, said the FTC.
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