FTC Settles With Defendants Claiming Bogus Ties To Google

An online marketer that falsely claimed ties to Google Inc. (GOOG) has been forced to stop operations as part of a Federal Trade Commission action that also resulted in the defendants giving up about $3.5 million in cash and other assets.

As part of a broader operation on scammers that bilk consumers through a variety of schemes--the FTC initially announced a complaint in 2009 against several defendants that allegedly sold a bogus work-at-home product under names including "Google Money Tree," "Google Pro," and "Google Treasure Chest."

By using the name and logo of the search giant and falsely promising that consumers could earn $100,000 in six months, the defendants lured consumers into divulging their financial account information to pay a modest shipping fee for a work-at-home kit. The FTC claims the defendants failed to disclose adequately, however, that buying the product would trigger automatic monthly charges of $72.21 for another product, and that those charges would continue until the consumer took steps to cancel.

The complaint charged that the defendants violated the FTC Act by failing to adequately disclose that consumers would be subjected to monthly charges; by making false or unsupported claims that consumers were likely to earn substantial income; and by falsely claiming that they were affiliated with Google.

The settlement includes a $29.5 million judgment against defendants Jonathan Eborn; Michael McLain Miller; Tony Norton; Infusion Media Inc.; West Coast Internet Media Inc.; Two Warnings LLC; Two Part Investments LLC; and Platinum Teleservices Inc.

A fourth defendant, Stephanie Burnside, is subject to a judgment of $741,900, the FTC said. The defendants will give up cash and other assets that include two cars, interests in a Harley-Davidson Inc. (HOG) motorcycle and a boat, and a gun collection--which total about $3.5 million. The unpaid portions of these judgments are suspended based on the defendants' inability to pay.

Under the settlement agreement, which was proposed in the U.S. District Court in Nevada, the defendants are banned from selling products through "negative option" transactions---in which the seller interprets consumers' silence or inaction as permission to charge them. The defendants also are barred from making misleading or unsupported claims while marketing or selling any product or service.

   -By John Kell, Dow Jones Newswires; 212-416-2480; [e-mail]