FTC Sues to Freeze Assets of Cellular Firm
The Federal Trade Commission on Tuesday filed suit against Century City-based American National Cellular, seeking a federal court order to freeze the company’s assets and enjoin it from doing business.
American National, which claims to be the nation’s largest cellular telephone application sales firm, has cost customers “millions of dollars” by “misrepresenting material facts” and failing to disclose that applying for cellular telephone franchises is a “high-risk investment,” according to the complaint filed in U.S. District Court. The lawsuit says that ANC charged customers in 50 states between $5,000 and $150,000 to submit the applications.
In late June, the FTC launched a nationwide investigation of companies that promise to submit applications for cellular telephone licenses. The licenses to operate mobile phone systems are issued through a lottery conducted by the Federal Communications Commission.
Company officials and Daniel Raiskin, an attorney representing the company, could not be reached for comment late Tuesday. In a June interview with The Times, marketing director Jerry Dobin said ANC stresses that the application is a “high-risk, high-return” proposition and does not promise applicants that they will win a license in the lottery.
The Arizona Corporations Commission, the Massachusetts secretary of state and the California Department of Corporations have all taken legal action against ANC for selling unregistered securities and other allegations, according to the FTC lawsuit. Three company officials named in the complaint also have “prior criminal fraud convictions,” according to the lawsuit.
In addition to ANC, the suit names Tabb Associates, Joseph Steingold, Earl Serap, Michael G. Godfree and Charles Michael Fischer. An ANC spokeswoman in Los Angeles said Serap was out of the office and unavailable for comment. An ANC spokesman in the firm’s San Diego office said Steingold was in the hospital. None of the others named could be reach for comment late Tuesday.
