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North Carolina Shuts Down Two More Telemarketers

June 14, 2006
One telemarketing scam that pitched phony English lessons and auto mechanics training and another that promised credit cards and credit repair but failed to deliver have been permanently barred from doing business in North Carolina.

The court orders came at the request of state Attorney General Roy Cooper.

"We work hard to go after telemarketing scams that hurt North Carolinians, and now we've hung up on two more," Cooper said.

Wake County Superior Court Judge Robert Hobgood agreed to ban F.G.H. International and its presidents, Franco Morales and Johnny Rojas, from telemarketing to consumers in the state. The court also ordered the defendants to pay $250,000 in consumer refunds and $5,000,000 in civil penalties.

Rojas and Morales formerly operated FGH out of California, but are now believed to be in Peru.

The summary judgment resolves Cooper's suit brought against F.G.H. in 2003. The company began marketing a program to teach English to Spanish-speaking North Carolina residents sometime around the fall of 2001.

Telemarketers working for F.G.H. told prospective customers that they had been specially selected by the U.S. government to receive subsidized training if they would first pay a quarter of the cost of the course.

The telemarketers also offered a program to learn how to be an auto mechanic using a similar pitch. More than 1,000 consumers in North Carolina responded to the pitch, paying $250 each. These consumers received a video with limited information but no formal training in English or auto repair.

F.G.H. is the fourth telemarketing fraud operation Cooper's Consumer Protection Division has stopped from targeting North Carolina consumers in the past year and a half.

Recently, another state agreed with Cooper's request to permanently shut down telemarketing by Phoenix Consumer Services to North Carolinians. Phoenix of Largo, Florida will pay nearly $16,500 for consumer education and refunds to consumers who haven't previously gotten credits to their accounts through the banking system.

Phoenix promised consumers pre-approved credit cards and credit repair services for a fee of $129.95. Consumers who paid the money got a packet of information about credit and how to apply for credit cards from other financial institutions but no real a credit card or help with their credit.

Cooper said he is continuing to pursue other fraudulent telemarketers that seek to take advantage of North Carolina consumers. Cooper has also helped secure multi-state agreements with two companies often used by telemarketing scammers, Western Union and AmeriNet, that make it easier for victims of these scams to get their money back.

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