ATM Fraud Criminals to Get $10,000 a Month?
The Fidelity ATM * Fidelity Bankard Business Opportunity Fraud is causing quite a stir over at a thread in scam.com.
Imagine how outraged the individuals might be on hearing that the defendants in this case have asked for $10,000 a month for living expenses from money that is currently frozen.
First, some background. According to the FTC Press release:
"The FTC charged that these scammers, selling ATMs, misrepresented the basic facts of their business opportunity: that purchasers would earn substantial profits; that the company had, or would have, secured locations for the ATMs within 45 days; that the ATMs would be installed and operational in the same time period; and that the company would provide substantial assistance, such as relocating underperforming machines. The complaint also alleges that they did not make required Franchise Rule disclosures and had no substantiation for their earnings claims."
(In a marked departure from the previous business opportunity sweeps, the FTC has actually published some of the material from the website.)
The defendants did not contest the injunction, and according to the Receivers' First Report approximately $900,000 was frozen. The Receiver calculated that approximately 100 distributors lost a total of $4.2 million, or an average of $40,000 per distributor. This is roughly slightly above the average take in a business opportunity fraud, but not that much above the norm.
On February 5th, 2007, the defendants sought to modify the consent order. The defendants' brought a motion to vary the injunction, in order to pay their living expenses, calculated at $10,000 a month. The defendants wanted $50,000, or living expenses for five months in order to tide them over until they found honest work. One of the defendants, Allison Steinberg, has a law degree. The defendants claimed to have no other sources of income and that some of the frozen funds were not as a result of their fraudulent activity.
The presiding Judge denied their motion, finding that their request was unreasonable and also denied the request for payment of attorney fees. Perhaps Allison will be her own first client?
