Agencies Target Home-Business Fraud

An undercover investigation of work-at-home businesses caught 77 operations suspected of using paid shills and making fraudulent earnings claims to dupe investors, the Federal Trade Commission said.

Operators of medical billing, envelope stuffing and vending machine businesses were among those that cheated investors by overstating potential profits and exaggerating demand, the FTC said. Some businesses also misrepresented the assistance they would provide investors in their franchises, said the FTC, which teamed up with the Justice Department and 17 state law enforcement agencies.

The FTC has filed 11 lawsuits in federal courts seeking permanent injunctions to halt the scams. The agency said that it had settled four related cases, and that state law enforcement agencies had brought 48 cases of their own.