Gardena Woman Says Georgia Firm Took Money, Kept ‘Prize’

A Gardena woman has filed a fraud complaint alleging that a telephone sales company took $698 from her but failed to give her a promised $10,000 prize.

Gardena detectives investigating Kathryn Hansen’s fraud complaint said she is one of more than 4,000 people nationwide who may have been defrauded by Republic Distribution Corp. of Atlanta. Georgia state officials have shut down telephone operations at the company in response to hundreds of complaints from irate consumers.

Investigators who served a search warrant on the company said they found records indicating that as many as 4,200 people may have been defrauded of thousands of dollars each in the high-pressure scam, Gardena Detective Ed Burnett said.

According to Hansen’s police report, a salesman from Republic Distribution called the 71-year-old woman on July 3 and told her that she had been selected to receive a $10,000 bonus in a few weeks if she invested $698 in the company now.

Over a 90-minute period, Hansen told police, two salesmen assured her that she would receive $10,000 if she cooperated. However, they told her to tell a third salesman--who tape-recorded only his conversation with her--that no such promise had been made.

Several weeks after Hansen sent a check by Federal Express, she received a box of 350 pens and a notice that she could collect a diamond-and-sapphire jewelry set if she sent in a $99 handling fee, Burnett said.

Since Hansen filed her complaint, the Gardena Police Department has received calls from at least four other South Bay residents complaining about the company, Burnett said. Those callers were told to contact the Atlanta Police Department directly.

Republic Distribution officials referred telephone calls seeking comment to an Atlanta attorney, who did not return the calls.