Rascal Scooters • Ostrov Sentenced • Ostrov Ousted • "The Ostrov System" • David Complains • The Company Responds • A Follow-Up from David • A Salesman's Lament • Rascals Come In Many Forms • Selecting a Scooter • Complaints

October 24, 2000
A federal judge in San Diego has sentenced former Electric Mobility Corp. sales chief Mark Ostrov to six months of detention and a $5,000 fine on mail fraud charges. The penalties are in addition to the roughly $250,000 Ostrov has already paid in restitution to an insurance company and 98 individual customers of Celebrity Choices Beds.

Judge Barry T. Moskowitz ordered Ostrov, 53, to serve two months in a federal detention center, two months in a community center or halfway house and two months of home confinement.

While Ostrov headed Celebrity Choice beds, the firm advertised nationally on cable channels using former game show host Wink Martindale as its pitchman. The company closed in January 1998 after a Mississippi man complained to federal prosecutors that he had not received his bed.

Officials then found nearly 100 other disappointed customers.

"I had people who sold their old bed or gave it away and they were sitting out there on the front porch waiting for the moving van to deliver it," San Diego U.S. Attorney Bruce Smith told The Associated Press.

The Better Business Bureau said it expelled Celebrity Choice beds in 1996 after receiving complaints about aggressive and misleading sales tactics. It had also expelled the company in 1994 but reinstated it after the company appealed the decision.

Ostrov had been a sales and marketing consultant to Electric Mobility since 1997, which makes electric scooters for aged and disabled users. The firm ousted Ostrov last month. Company President Michael Flowers said "none of the incidents that are the subject of his guilty plea arose in connection with his service at Electric Mobility." And Flowers said Celebrity Choice Beds was "not affiliated in any way" with Electric Mobility, headquartered in Sewell, NJ.

But while Electric Mobility has recently tried to distance itself from Ostrov, its critics note that Ostrov's tenure as CEO of the now-defunct Celebrity Choice Beds overlapped with his consultancy to Electric Mobility. Many former sales executives say Ostrov is responsible for the high-pressure sales techniques that the scooter company has adopted in recent years.

One persistent critic is the Rev. David G. Humphrey, a former regional sales executive for the company. He says the company seems to have learned little from the Ostrov episode.

"So far all they have done is to remove Mark Ostrov's name from their sales program but there have been no substantive changes," Humphrey said. Humphrey noted that in his pre-sentencing remarks, Judge Moskowitz drew a distinction between, for example, car and real estate sales where most consumers are aware that prices are subject to negotiation and in-home sales situations of electric scooters, where many consumers are not aware that the price is negotiable.

In-home salespeople mislead consumers into thinking that they have offered them the lowest price possible rather than inviting them to make a counter-offer, the judge said, condemning such practices as fraudulent.

"The judge acknowledged that most cases of this type of fraud are not prosecuted so you can choose to take your chances. But even if you are never arrested, fined or imprisoned, your system is still ethically, morally and legally wrong," Humphrey said in an open letter to Electric Mobility Corp.

Humphrey also said that it without a new sales policy, Electric Mobility will not rehabilitate its reputation with consumers, the media and others, including the powerful organizations representing older consumers. He noted that Modern Maturity, the influential magazine published by AARP recently stopped accepting advertisements from Electric Mobility.