Scammers Hit With Massive $30 Million Fine Over Deceptive Robocalls
A series of deceptive robocalls has resulted in $30 million worth of civil penalties, a smackdown the Federal Trade Commission claims is the largest penalty ever imposed for violations of the Do-Not-Call Registry.
Paul Navestad was hit with a $20 million judgment - the largest ever against a defendant in an FTC case - while Christine Maspakorn received a $10 million judgment.
According to the court, Navestad and Maspakorn placed more than 8 million robocalls, including 2.7 million calls to phone numbers on the federal Do Not Call list. Operating as the Cash Grant Institute, the duo claimed that cash grants were available from federal, state, and local governments, private foundations, and “wealthy individuals.”
The calls claimed that consumers were pre-qualified for grants up to $25,000 and directed them to visit the Navestad and Maspakorn’s websites. However, these sites - including requestagrant.com and cashgrantsearch.com - instead charged a fee to provide general information about how to obtain public and private grants.
“It was only after consumers had paid the fee that they learned that it was very difficult to obtain cash grants from public or private sources, that very few people qualified for such grants, and that obtaining a grant involves a lengthy, competitive application process,” the FTC said.
The FTC stopped the scheme and froze the duo’s assets in 2009. Navestad and Maspakorn refused to testify or turn over assets, though through his attorney, Navestad claimed he was only a consultant. District Court Judge Michael Telesca was not convinced and found that the FTC’s evidence told a different story.