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Sep 22

Iowa Attorney General reaches agreement with “sucker” list seller

gavel-justiceDES MOINES – Attorney General Tom Miller today filed consumer fraud lawsuits against two out-of-state mailing operations that Miller alleges are predatory businesses that use deceptive mailings to profit from the elderly and other vulnerable Iowans.Miller also announced the settlement of a third case involving a New Jersey list broker company that markets consumer lead lists—including so-called “sucker” lists—to mass mailers.

Iowa’s three consumer protection enforcement actions were coordinated with the U.S. Department of Justice, the U.S. Postal Inspection Service, the Federal Trade Commission, the Department of the Treasury, and other federal criminal and civil law enforcement agencies. Today the federal agencies announced wide-ranging enforcement actions—including criminal charges, economic sanctions, seizure of criminal proceeds, search warrants, and civil injunction lawsuits—targeting mass mailing schemes that defraud elderly and vulnerable consumers nationwide.

“Our civil enforcement actions here in Iowa exemplify our ongoing efforts to pursue operations that we allege prey upon older Iowans and vulnerable Iowans,” Miller said. “Fighting this kind of consumer fraud is one of our highest priorities. We’re very pleased to work with our federal partners in this unprecedented attack on mail fraud to help protect people from this kind of financial exploitation.”



Waverly Direct Inc. and Gordon Shearer Lawsuit
In Iowa, Miller filed a consumer fraud lawsuit in Polk County District Court against Waverly Direct Inc. and company owner and president, Gordon F. Shearer, both of Lynbrook, New York.

The lawsuit alleges that the company sends Iowans a congratulatory letter from the fictitious “Gerald St. John,” supposed director of the Numerological Resource Center, which, according to the lawsuit, is also a sham. The letter claims that the recipient has been specially selected to receive “life-changing” benefits, which would begin upon payment of a $20 “service/handling fee.”

“These solicitations, which we allege used a variety of falsehoods to take money from elderly Iowans, was bad enough,” Miller said. “But we further allege that one of the main functions of this deceptive mailing was to locate vulnerable people whose names could be sold to other scammers.”

Nicholas Valenti & Companies Lawsuit
The second lawsuit, also filed in Polk County District Court, names Nicholas Valenti and three of his companies, WB Co., TL Distribution, and Southwest Publishing, all of Las Vegas.

The lawsuit alleges the defendants send deceptive mailings to Iowans promising to reveal – for a price – methods for consistently winning large sums of money in lotteries and other forms of gambling. The lawsuit also alleges that Valenti sells the rights to use his deceptive mailers to other would-be scammers.

“Both of these lawsuits allege wrongdoing on two levels,” Miller said. “In both suits we allege that the defendants not only sent deceptive mailings to Iowans, but also make money by selling the tools for others to pursue similarly predatory fraud-by-mail.”

Macromark Inc. Settlement
In a separate case, Miller today reached an agreement with Macromark Incorporated, of Danbury, Connecticut, over Miller’s concerns the company engaged in consumer fraud through its role in providing consumer lists to other companies, or list brokering.

The settlement, called an assurance of voluntary compliance, requires Macromark to refrain from list brokering that exposes Iowans to fraud at the hands of scammers using psychic or sweepstakes schemes. The company agreed to pay $30,000 to support future efforts by the Iowa Attorney General’s office to protect older Iowans from consumer fraud. The company denies wrongdoing as part of the agreement.

Miller contends that Macromark played a significant and ongoing role in facilitating deceptive marketing by providing lists of vulnerable consumers, often elderly, to off-shore and US-based mass mailing operations. The operations used psychic- or sweepstakes-oriented solicitations promising life-changing wealth to consumers willing to send them money.

“In our view, Macromark’s own files showed that the company knew it was helping scammers defraud vulnerable consumers – often the elderly,” Miller said. “We make every effort to deprive scammers of the support systems they need to prey on consumers, particularly the elderly, and we alleged that Macromark provided exactly that kind of support.”

CNN Story Highlights Payment Processor Targeted Today by Feds and Tied to Previous Iowa Enforcement Actions
CNN.com investigation posted today illustrates how Canadian payment processing company PacNet, a major target of today’s federal enforcement efforts, handled consumer financial transactions for a significant number of fraudulent operations—many of which have been subject to previous civil enforcement actions by Miller’s office. Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated the PacNet Group as a “significant transnational criminal organization.”

Consumer Tips to Help Fight Mail Fraud

  • Anyone offering to make you wealthy by using their unique powers or sharing their special secrets – for a fee – is trying to scam you. Don’t be taken in!
  • Letters from strangers who call you by your first name and claim a personal interest in your life are often mass-mailed to tens of thousands, to see who will bite by sending a check. Don’t waste your money!
  • If an Iowan sends money in response to a fraudulent solicitation, he or she may be added to a target or “sucker” list that is used by other scammers — developing into a feeding frenzy that can drain a vulnerable victim’s bank account. Be especially aware that this can happen to older relatives, neighbors, or friends. Report such incidents to the Consumer Protection Division.

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