Court Shutters Advance-Fee Card Fulfillment Firm

A federal court has shut down a company that allegedly processed payments and provided fulfillment services for telemarketers engaged in advanced-fee credit card schemes, the Federal Trade Commission announced Thursday.

In a decision handed down Dec. 12, the U.S. District Court in Tampa, FL ordered Ira N. Rubin, also of Tampa and the businesses he controls — Global Marketing Group Inc., Global Business Solutions LLC, Globalpay Inc., Globalpay LLC, Globalpay BV, Synergy Consulting Services LLC, and First Processing Corp. — to stop processing payments for telemarketers and violating the FTC’s Telemarketing Sales Rule.

The complaint also names Rubin’s wife, Phoelicia Daniels as a defendant. The court has frozen all of their assets, but has allowed Daniels $10,000 for personal expenses, according to the FTC.

According to the FTC, Rubin and his companies aided at least nine Canada-based advance-fee credit card schemes under which consumers allowed money to be debited from their bank accounts in exchange for the promise of an unsecured credit card. However, the FTC said, the most the consumers would receive was a so-called benefits package.

The FTC alleges that Rubin’s companies would deduct processing fees from the proceeds and forward the balance to unnamed telemarketing firms. Rubin’s companies also provided customer service and complaint handling, order fulfillment, list brokerage and other services, the FTC said.

The fulfillment services included sending consumers essentially worthless “benefits packages” instead of a promised credit card, according to the FTC. Rubin’s companies sold consumers’ personal and financial information, including names, addresses, and telephone numbers, to telemarketers who used the information to contact and defraud consumers, the FTC said.

Advanced fee credit card schemes have made quite a bit of news lately.

Earlier this week, the co-owners and seven office managers of telemarketing firm Gecko Communications Inc. were sentenced to federal prison for defrauding 83,000 consumers of $15.7 million in a seemingly unrelated advanced-fee credit-card scheme.

According to prosecutors, Gecko falsely offered people with bad credit pre-approved credit cards if they agreed to debit their bank accounts for between $159.95 and $229.95. But rather than cards and improved credit, all consumers got for their money was an application, according to officials.

As a result, Christopher L. Carlson, 37, of Glenwood, IA, and Jason R. Spencer, 27, of Osceola, IA were sentenced to two years in federal prison without parole. Steven T. Rice, 45, of Kansas City, MO, was sentenced to two years and 11 months in federal prison without parole.

Also, Zachery T. Whitehill, 30, of Sahuarita, AZ, was ordered to serve 11 years and three months in federal prison without parole. Jaime E. Cook, 31, of Kansas City, MO, was sentenced to five years in federal prison without parole. Bradley L. Lovstad, 45, of Muscantine, IA and Monty E. Wanless, 31, of Kansas City, MO were sentenced to eight years and one month in federal prison without parole.

All were also ordered to serve three years of supervised release after their jail terms and to pay $6,048 in restitution each.