Wal-Mart telemarketing scammers ordered to forfeit $28.2M

The Federal Trade Commission today said court actions against a nationwide telemarketing scheme dubbed the “Wal-Mart Shopping Spree” scam will force the scammers to pay back $28.2 million of their nefarious gains.

The court actions also ban Brian MacGregor, the architect of the scheme, from engaging in any aspect of telemarketing or the selling of program memberships. In this scam, consumers were falsely promised free gifts and wrongfully paid monthly fees for “program memberships” such as discount buyers’ and travel clubs..MacGregor and Membership Services Direct, Inc., also known as Continuity Partners, Inc., have been ordered to pay the $28.2 million to the agency, representing the scheme’s  net profits.

The court has also barred MacGregor and Membership Services Direct, Inc. from making material misrepresentations in connection with the sale of any goods or services, engaging in unauthorized billing, and violating any provision of the FTC’s Telemarketing Sales Rule (TSR). The FTC filed a complaint in the U.S. District Court for the Central District of California, charging the defendants with violations of the FTC Act and TSR.

The complaint alleged that the defendants cold-called consumers with the goal of tricking them into disclosing their bank account information, falsely promising them valuable incentives such as gift cards and “shopping sprees” to retailers such as Wal-Mart and Macy’s, movie passes, and gas vouchers. All of these items were supposedly free with the payment of a nominal shipping-and-handling fee. In many instances, the defendants misrepresented that they were affiliated with well-known retailers, government entities, or the consumers’ financial institutions.

The FTC said the defendants also harassed consumers by making repeated telemarketing calls to them, ignoring consumers’ requests not to call again, and using profane and abusive language during the telemarketing calls. Finally, the defendants made unauthorized debits from consumers’ bank accounts after tricking them into disclosing their account information.In addition, the court has approved settlements for the remaining defendants in this case.

In connection with those settlements, MacGregor’s wife, Christine MacGregor, has turned over title to two properties and proceeds from the sale of two other properties. Brian MacGregor’s co-defendants – Harijinder Sidhu, Joseph LaRosa, Jr., Pranot Sangprasit, William Heichert, Michael Cushing, Paul Tosi, and Manh Cao – are barred from making material misrepresentations in connection with the sale of any goods or services, engaging in unauthorized billing, and violating any provision of the TSR, the FTC said.

The other companies involved in the telemarketing scam – Universal Premium Services, Inc. (aka Premier Benefits, Inc.), Consumer Reward Network, Inc., Star Communications LLC, All Star Access, Inc., Prime Time Ventures, Inc., Connect2USA, Inc., Merchant Risk Management, Inc., and Pantel One Corporation – are barred from making material misrepresentations in connection with the sale of any goods or services, engaging in unauthorized billing, and violating any provision of the TSR. They have been shut down by a permanent receiver appointed by the court. 

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