Postal Inspectors Scrutinize Firm’s Sales Practices

Postal inspectors are investigating a San Fernando Valley telemarketing firm that allegedly took hefty fees from out-of-state customers for loans that were never made.

The criminal probe by the U.S. Postal Inspection Service follows a story in The Times last month on Gold Star Group, a Reseda-based firm that has used newspaper ads and a toll-free number to lure consumers seeking personal loans.

Customers said they mailed Gold Star a $269 processing fee after being told their loans had been approved. But they said the loans weren’t made and that they were given the runaround when they made inquiries.

At least 15 complaints have been filed with the Better Business Bureau of the Southland and the California attorney general’s office, but sources familiar with the case said they believe the number of alleged victims is many times larger. Complaints have come from customers in Illinois, Iowa, Montana, Arizona, Texas and Louisiana.

A spokesman for the Postal Inspection Service said the agency had no comment, “other than to confirm that the name [Gold Star] was brought to our attention.” The Times learned of the probe from alleged victims who were interviewed by postal inspectors and from other law enforcement sources.

Gold Star, whose phone bank was located in a dingy, second-floor office in the 18500 block of Sherman Way, appears to have abandoned that location. And Joseph E. Perez, the Mission Hills man who heads Gold Star, told The Times that he is closing the firm.

“We’re not in the business anymore,” Perez said in a telephone interview, citing problems getting new business and “the pressure that you guys are putting on me.”

“I’m trying to be an honest business person,” Perez said.

Perez and an associate were arrested last November by Los Angeles police in connection with a different business venture. They ran Express Homes, a Van Nuys rental listing service that was accused of cheating scores of renters out of $150 apiece.

In the Express Homes case, which is pending, the Los Angeles city attorney’s office charged Perez with 18 misdemeanor counts of grand theft and business and professions code violations stemming from the firm’s dealings with at least 58 purported victims. Perez has pleaded not guilty.

Unknown to authorities, at the time of Perez’s arrest in the Express Homes case he had already launched the Gold Star venture with newspaper ads in several states.

The Gold Star ads have run in large dailies, such as the New Orleans Times-Picayune and the San Antonio News-Express, and in free weekly shoppers published in several western and Midwestern states.

“NEED MONEY?” beckoned a typical ad. “Low interest personal/debt consolidation loans from $1,000 to $50,000 available for any reason. Bad credit no problem.”

Customers said that when they called a toll-free number to seek a loan, they were asked questions--such as their name, address, employer and income--and were told to wait a few hours for a decision on their application. When the customers called Gold Star back, they said they were told that their loans had been approved. Approved clients were asked to send a $269 processing fee to Gold Star at “suite 304” of an address on Foothill Boulevard in La Crescenta. The address was not Gold Star’s office, but a commercial mail drop where Gold Star merely rented a box.

In interviews with The Times, alleged victims said they were angry and ashamed they had let themselves be tricked. “It’s so ridiculous of me to even do this, but I was trying to get a car loan, and my credit is not the greatest because I’ve been through a divorce and was taken through the ringer,” said Maggi Lambert of Townsend, Mont.

Mitch Taylor, a carpet installer in a suburb of Phoenix, said he was desperate to get a $6,000 loan to consolidate his debts, including bills from two surgeries last year.

“I should have known better,” Taylor said. “I was trying to get a loan because I needed money. I didn’t need to be ripped off for $269.”

In an interview on Tuesday, Perez told The Times that he has paid refunds to “maybe 50, 60, 70” dissatisfied customers. But Wanda Dudley, a New Orleans woman who Perez said was given a refund, later told The Times that this was untrue.

Perez denied that customers were guaranteed loans, saying “we don’t promise them anything.” Moreover, he said, “lots of people get loans” through Gold Star--but when asked for details, Perez referred a reporter to his lawyer, who failed to return phone calls.