A federal court in Nevada has issued an injunction at the request of the Federal Trade Commission that halted an allegedly bogus prize-promotion scheme being run by defendant Glen E. Burke.
The agency characterized Burke as a “repeat offender” who was enjoined from making deceptive telemarketing pitches 15 years ago. In his latest efforts, Burke and his company, American Health Associates, reportedly used deceptive telemarketing to contact consumers and tell them they won a valuable prize worth thousands of dollars.
To receive the prize, consumers had to purchase vitamins – paying between $300 and $500 – and in some cases, make additional payments, the agency said. But consumers either did not receive a prize at all or got “cheap costume jewelry or a lithograph print,” according to the FTC’s complaint.
In 1996 the FTC obtained an order against Burke based on his business opportunity scam. Two years later, after Burke violated that order, a U.S. District Court judge entered a second order permanently banning him from telemarketing and from making material misrepresentations about any product or service. Burke has also been the subject of enforcement actions by other federal agencies, the FTC said.
According to the complaint, Burke’s latest scheme has been operating in violation of the 1998 order for the last two years and that he was also engaged in a direct mail sweepstakes scheme in which consumers were promised prizes they never received after they completed a form and returned it with a small “processing fee.”
U.S. District Court Judge Philip M. Pro froze the assets of the defendants and appointed a receiver for the company, pending the outcome of a contempt action against Burke for violating the 1998 order. The agency said it is also seeking compensation for the consumers harmed by Burke’s multiple violations.
To read the FTC’s motions and the court’s preliminary injunction order, click here.
Why it matters: Burke faces multiple allegations of violating a consent order with the FTC that arose from his telemarketing scheme and his direct mail sweepstakes scam.