A Beverly Hills man and three associates were charged with consumer fraud on Monday by the state attorney general's office in the alleged solicitation of high school students across the country to pay $30 apiece for copies of a book listing their scholarship achievements.
The trouble is, said Deputy Atty. Gen. Robert G. Hatton of the consumer fraud section, that the book--"Who's Who in High School"--was never published.
Nor, Hatton said, did the operators of the alleged scheme appear to have any idea whether the students contacted were honor students. One complaining mother, Hatton said, pointed out that there was no way her son could qualify for any sort of honor list.
The students were also offered plaques and certificates at an added cost, but those never arrived either, Hatton maintained.
The defendants said, however, that they never meant to defraud anyone, that they simply ran out of money before they could publish the book or fill all the merchandise orders.
Charged in the complaint filed in Los Angeles Superior Court was Steven E. Stockton and two of his companies, Who's Who Honor Society Inc. and National Merit Foundation.
Also named were PCN Distributing Corp., with which Stockton reportedly contracted to send out the actual solicitations from mailing lists he acquired, and its officers, Richard Angelini, Emil Moscowitz and Elvin Chen.
After being sued for trademark infringement by the publisher of an established publication, "Who's Who Among American High School Students," Stockton and his associates used the name "National Merit Foundation" to send another mailer to high school students across the country, Hatton said.
That mailer allegedly told students that because of their "outstanding achievements," they were to be listed in a publication called "The National Honor Roll."
The price for the honor was $30.
The National Merit Scholarship Corp., which promotes the widely known National Merit Scholarship Program, also sued Stockton for trademark infringement.
Although neither book promised by Stockton and his associates was published, according to the attorney general's office, no students who sent in money received refunds.
Hatton said the alleged scheme operated from 1984 through much of 1985, but he could not say how many students responded to the mailers or how much money was collected.
Stockton said after learning of the suit that the lists had been purchased from a large firm in Chicago and that it contained the names of students who "had been accepted to some of the major universities in the country." Unfortunately, he added, there were some mistakes, because so many names were involved.
He said after funds from the mail responses were exhausted early last December, he and his associates attempted to borrow money to publish the book and fill the orders, but were unable to do so. The complaints developed because "we couldn't respond to all the mail that was sent to us," he said.
"We never intended any kind of fraud," Angelini insisted. "We're certainly sorry for what happened. It was never done on purpose."
He said many of the orders for diplomas, plaques and key chains were filled.
"Nearly $10,000 worth of scholarships were given out as well," he said.
The suit asks that the defendants be barred from soliciting sales of any publication for 10 years, that they be ordered to halt all misrepresentations and that civil penalties of at least $500,000 be assessed.