An Arizona firm that fraudulently marketed home-based Internet businesses across the country is being shut down.
A consent agreement reached by state and federal officials with the owners of The Results Group will forever bar them from any form of telemarketing. The deal with Edward Longoria and Amber Halvorson also severely restricts how they can conduct other types of businesses.
Legal papers detailing the deal were filed today in Maricopa County Superior Court.
The state settlement is linked to a separate agreement the Federal Trade Commission reached with the pair that imposes a $19.5 million penalty. But that fine would not be collected if they turn over all the assets of the company, a figure believed to be $435,000.
Separately, the pair will pay the state $40,000. Attorney General Terry Goddard said $25,000 of that will be used to pay for consumer financial education efforts; the balance pays the state's legal fees.
But Goddard said the settlement is significant -- and not only because Longoria and Halvorson will no longer be telemarketing.
"It's a powerful statement to an awful lot of people who might be tempted in the future to try to get one of these computer businesses going,'' he said.
"That's pretty much reserved for the major players,'' Goddard added. " 'Guaranteed income' is a myth.''
According to court documents, the company promised to set up "turn-key, risk-free'' home Internet businesses.
The company, based out of an office in central Phoenix, would market web sites that would-be buyers were told would be "affiliated'' with Fortune 500 companies. The premise was that tens of thousands of World Wide Web users would access their sites and, from there, go to the retailers who would pay commissions to the site owners.
Those sites were sold for between $99 and $599.
But that wasn't the end of it: Goddard said when the web traffic -- and profits -- failed to appear, consumers were told they now needed to purchase advertising packages to lure Internet users, packages which could cost up to $9,900.
The FTC said most consumers ultimately earned no profits, whether or not they bought the additional advertising.