Accusations of fraud filed in federal court in Nevada against a business that purported to help its clients' Internet companies succeed were settled Jan. 17. The Federal Trade Commission, which filed the commercial litigation, got most of the 40 defendants to agree to stop business coaching activities and give up significant assets.
The defendants include 22 businesses and several individuals. The companies all have ties to Ivy Capital Inc. Ivy and the other companies marketed services for people looking for help with their Internet-based businesses. According to clients, they paid up to $20,000 for advice but frequently received little help. Many clients attempted to get a refund but were frustrated by the procedure, which the FTC said violated the defendants' own refund policy.
One individual defendant and business entity are facing a $46 million judgment in the fraud scheme, though that will be suspended once they give up nearly $69,000 in cash. Similarly, the FTC hit 21 individuals and businesses with $130 million in penalties if they misrepresented their current financial situation and fail to give up smaller amounts of assets agreed upon in the settlement. Assets included in the settlement include eight vehicles, two homes and cash. The defendants are also banned from marketing Internet consultancy in the future.
A business that is defrauded out of money may have legal options to recover some or all of the money it lost. An attorney experienced in business litigation can help evaluate a business' case for possibly entering into civil litigation against the fraudulent person or company.
Source: Bloomberg Businessweek, "FTC reaches settlement in business 'coaching' case," Jan. 17, 2013