A Financial Guru Produces His Own Incredible Return : Marketing: The former 'no money down' advocate has new products to promote. But his latest business isn't without its own controversy.

TIMES STAFF WRITER

Tony Hoffman, a get-rich-quick-with-no-money-down guru in the real estate business during the 1980s, has reappeared, peddling car wax, toasters and other products in half-hour TV commercials that resemble talk shows.

Hoffman is seen regularly on local stations as the "host" of commercials for "Liquid Lustre," a car wax, and "Kwik Snak," a toaster-like kitchen appliance, both of which are marketed by a Scottsdale, Ariz. company called Twin Star Productions Inc.

The Federal Trade Commission and several states have forced Twin Star to stop selling other products on television. The states said ads for the products--including one hosted by Michael Reagan, son of the former President--were misleading. Hoffman didn't produce those ads and said his only relationship with Twin Star is to produce other commercials for the company.

Hoffman is president of Maui Productions of Thousand Oaks, which, along with Venture Marketing Group in Westlake Village, puts together his TV ads.

It's the latest line of business for Hoffman, 48, who made a name for himself as one of the best-known real estate gurus in the mid-1980s. At his peak he hosted "Everybody's Money Matters," a daily investment talk show that Hoffman bought time for on cable TV, where he peddled his $495, 16-cassette home study course on behalf of his now-defunct Westlake Village company, National Superstar. Among other investment strategies, Hoffman's course preached the idea of using IOUs to buy real estate from people desperate to sell, then turning around and selling it to someone else for a quick profit.

Hoffman was one of about 20 real estate gurus who appealed mainly to those in dead-end jobs with the lure of becoming wealthy. In the mid-1980s some industry estimates said real estate promoters as a group were taking in $150 million a year.

But the fortunes declined for many promoters, including Hoffman, as low inflation rates, and newer tax laws tightened deductions for second homes, putting a crimp on no-money-down deals. Critics said their advice was easily abused and thousands of unhappy customers sought refunds from various promoters.

For a while, though, Hoffman thrived. In 1986, Hoffman said he was worth $10 million, and he had a chauffeur-driven limousine with the license plate "NEGOC8R" and showed off Salvador Dali art in his home. In one 12-month period Hoffman took in a $363,000 salary from the company he controlled, National Superstar.

But the company had its problems, losing $2 million on sales of $21 million in 1985, and another $1.2 million in the first nine months of 1986. Then, in October, 1986, National Superstar filed for bankruptcy protection, listing $661,000 in assets and $3.6 million in debts--including $1.4 million worth of refunds it owed to 5,710 customers. The company was eventually liquidated.

Hoffman filed for personal bankruptcy in April, 1988, listing $831,050 in assets and $6.8 million in liabilities, many of which were debts of the company.

Despite the thousands of refunds to customers of National Superstar, Hoffman said recently there was nothing wrong with the real estate advice he peddled: "The courses work. That had nothing to do with the downfall." The big problem, he says, was there were too many other promoters. "There were so many of them."

His newest line of work has proliferated since the early '80s when the federal government lifted a regulation that limited the amount of advertising that could be aired during a single hour.

On Hoffman's car polish commercial he is, typically, enthusiastic.

"I'll tell you that is the best wax I have ever seen in my life," Hoffman raves in the "Liquid Lustre" ad, which follows the format of an interview show like that of Phil Donahue. The paid program, called "Incredible Breakthroughs," even has an audience that's asked to help demonstrate the polish. The audience, Hoffman says, is usually composed of friends and relatives, plus some actors who are paid, he said, "$35 a day plus pizza."

In the commercial, a balding, mustached man identified only as "Pete" pours acid, sprays paint, and burns lighter fluid on car tops apparently protected with "Liquid Lustre," then cleans off the blemishes with the same polish. Pete even lights a fire on the hood of a Chevy belonging to Hoffman's wife.

"A one-step application will clean, wax, protect the automobile, take off the over sprays, the leaf imprints, the bird stains, the road film, the tree saps and tar," Pete says in the ad. "It completely emulsifies it."

"That's incredible," Hoffman responds.

During the commercial, audience members shake their heads when asked if they think "Liquid Lustre" can protect a car from the damage Pete tries to inflict, then cheer his apparent success using the polish.

Hoffman also pretends during the commercial to negotiate the price of the "Liquid Lustre"--along with some vinyl cleaner, car shampoo, and a chamois cloth--from about $40 to about $30, with a second bottle of the polish thrown in.

Hoffman said he has made nine segments of "Incredible Breakthroughs" since November, advertising various products including a tooth whitener called "Brite Smile," and a memory-improvement course called "The Memory Powers System." Hoffman appears in six of them.

Six of the segments were made on speculation: Hoffman finds a product, produces an ad, and finds a marketing company, like Twin Star, to pay him for the segment. That company buys air time and handles the telephone marketing of the products. He declined to say what other companies he's produced commercials for.

In Los Angeles, Hoffman's ads run with disclaimers saying the stations aren't responsible for the ads' contents. A spokeswoman for one of the stations, KSCI (Channel 18), declined to say exactly how much Twin Star pays for air time on that channel, but said that in the morning, when many paid programs are broadcast, a half-hour slot typically costs about $1,000.

According to a filing with the Securities and Exchange Commission, Twin Star, which was founded in November, 1987, posted net income of $126,913 on sales of $27.2 million in 1988, and earned $505,582 on sales of $21.9 million in the first nine months of 1989.

But Twin Star has also been the target of efforts by the federal government and some states to crack down on their commercials. One subcommittee of the U.S. House of Representatives has also held hearings on commercials with the look-alike talk show format.

The state agencies were especially concerned with an ad for a "diet patch" that was peddled on a half-hour ad titled "The Michael Reagan Show," hosted by the former President's son. The patch, containing highly diluted calcium carbonate, was supposed to be worn next to the skin to aid weight loss, but some states said the product didn't work as claimed and complained that the ads looked too much like consumer programs.

The state of Texas is negotiating a consent order with Twin Star to stop running the commercials (now discontinued anyway), and may force the company to pay a fine. Twin Star paid the state of Missouri a $10,000 fine as part of another similar settlement in January, 1989.

And Twin Star said in an SEC filing that it is negotiating a "consent agreement" with the Federal Trade Commission, agreeing to stop selling "certain products" and pay a $1-million fine. The FTC would not comment. Twin Star officials did not return phone calls.

Hoffman wouldn't comment on Twin Star's legal problems. But he said he stands by his current "Incredible Breakthrough" ads, including a claim that "Liquid Lustre" wax can "increase the value of your car by hundreds, even thousands of dollars."

Asked what kind of car could be so enhanced by a wax, Hoffman said: "I'm not going to give you a quote on that one."

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