Work-at-home schemes shut down by state

NASHVILLE (AP) — Tennessee Attorney General Paul Summers has shut down a work-at-home scheme after his office received complaints from more than 300 people.

Keith Dyer, Detria Dyer and Phyllis Winston, all of Nashville, agreed to permanently shut down GICO and Phase 7 businesses, which guaranteed participants thousands of dollars per week by stuffing envelopes at home. The defendants also agreed to pay $100,000 in restitution to consumers who filed complaints and to pay the costs of the investigation, civil penalties and fees.

“This is a good agreement, and I’m glad we were able to prevent more Tennesseans from being deceived by GICO and Phase 7,” Summers said Tuesday in a news release.

Complainants told state officials that when they responded to the businesses’ advertisements, they received instructions to send a $19.95 registration fee.

In some cases, the consumers received nothing for the fee. Other consumers received materials advising them they had to spend their own money to recruit customers for the businesses’ catalogs and brochures.

Sharon Curtis-Flair, a spokeswoman for the attorney general’s office, said the defendants would have faced civil litigation for violation of the Consumer Protection Act if they had not taken part in the agreement. Each violation is punishable by $1,000.

The defendants also may have faced criminal lawsuits, she said.

The Federal Trade Commission in December 2003 initiated “Operation Pushing the Envelope,” in which federal, state and local law enforcement targeted fraudulent envelope-stuffing businesses across the country.

The FTC, Justice Department, U.S. Postal Inspection Service and law enforcement agencies have taken civil and criminal action against more than 200 operations they said engaged in fraud and/or violated consumer protection laws.