Asset Protection Group?
Robert Patrick reports on an odd story in STLtoday.
"A man jailed and fined a decade ago for scamming customers with a St. Louis based "get rich" program is in trouble again after a federal judge ruled that he violated a court order by lying to customers.
The man, Richard C. Neiswonger, and William S. Reed are partners in Asset Protection Group Inc., which took in $19.8 million from 2000 to 2006 by signing up almost 2,000 customers, court documents and testimony show. Asset Protection Group has an office in Las Vegas, but the earlier sales program had been based in St. Louis.
The customers were promised the chance to earn six-figure incomes selling Nevada and offshore corporations that supposedly shield buyers' assets from the IRS, law enforcement and "capricious federal judges."
Despite paying up to $9,800 apiece to peddle the program, the customers, known as consultants, got little in return, U.S. District Judge Stephen N. Limbaugh wrote in an order made public Tuesday."
The story is odd because in this case Neiswonger's previous fraud was very easy to discover. Go to www.ftc.gov and search on his name "Neiswonger". What you will find is this 1996 complaint against Neiswonger for selling a fraudulent business opportunity. From the complaint:
"Since at least 1993, defendants have marketed and sold business training courses and affiliations to consumers throughout the United States. Defendants S&K, S&K PC, Neiswonger and Kossmeyer (the "S&K defendants") sell a course and affiliation they market as "S&K Group." Defendants MRS, Neiswonger, Nancy Freeman and Marc Freeman (the "MRS defendants") sell a course and affiliation they market as "Medical Recovery Service." The courses and affiliations consist of a two-day training session, class manuals, computer software, a newsletter, a six-month (S&K) or one-year (MRS) period of support, and a national network of independent business consultants.
The S&K defendants offer consumers the opportunity to become business consultants, called "S&K associates," in two fields. The first field is capital acquisition, where the consultant applies for bank loans on behalf of clients and keeps a percentage of each loan as a fee. The second field is expense reduction, where the consultant helps clients identify areas where money could be saved and keeps a percentage of the savings as a fee. The S&K defendants represent to prospective purchasers that S&K associates earn client consulting fees from operating such a business, full-time or part-time, resulting in a six-figure income and/or a $150,000 income from one or two projects per month. The price of the S&K training and association is $12,900 payable by certified check at the beginning of the training session. S&K's president Carl F. Kossmeyer teaches the capital acquisition portion of the program."
This is one of those cases in which the simple due diligence step was not taken, in part I believe because of greed. I rarely say this, and I may be wrong, but I lack sympathy for individual who wanted a "chance to earn six-figure incomes selling Nevada and offshore corporations that supposedly shield buyers' assets from the IRS, law enforcement and "capricious federal judges." (For more on the tax scam angle, go to the Asset Protection board.)
The basic due diligence tip remains the same: search at the FTC for information about the distributor. If you find something, run away -and if not, keep looking.
