Defunct Firm to Pay $2.5 Million to Settle Suit
A defunct Westlake Village telemarketing company has agreed to pay more than $2.5 million to settle a lawsuit claiming it defrauded thousands of customers, the Federal Trade Commission announced.
American Fortune 900 Inc. will pay the money to resolve charges that it falsely promised high profits from low-risk investments in 900-number telephone services, FTC officials said.
The company was one of several targeted earlier this year in a nationwide federal and state crackdown on fraudulent telemarketing schemes. The schemes were designed to persuade unsuspecting investors to buy largely worthless stakes in 900-number ventures or federal licenses for paging systems, the FTC said.
In January, the FTC and state securities regulators unveiled 85 lawsuits in connection with the probe. At the time, they described high-tech businesses as a popular theme for telemarketing confidence artists.
American Fortune is in the hands of receivers and is no longer operating. FTC attorney Gregg Shapiro said he does not know how much of the $2.5 million will be recovered and returned to defrauded investors.
The settlement prevents the company from misrepresenting the risk or profit potential of investments, or transferring its customer lists.
In August, American Fortune principal Rory Cypers agreed to pay $100,000 to settle charges against him.
The settlement, filed in federal court in California, must be approved by a judge after a public comment period.
