The state Division of Consumer Affairs has filed suit against a Mendham-based work-at-home company and its principal, alleging that they defrauded consumers through offers to earn income by stuffing envelopes or assembling booklets.
The lawsuit, which the division announced Wednesday, is part of “Operation Empty Promises,” a nationwide crackdown against work-at-home scams. Operation Empty Promises is a multi-agency law enforcement initiative which includes 10 Federal Trade Commission actions, 48 criminal actions by the U.S. Department of Justice, 7 additional civil actions by the U.S. Postal Inspection Service, and 26 actions by state law enforcement agencies.
New Jersey’s five-count complaint, filed in state Superior Court in Newark, alleges that David S. Brookman, 40, and his company, Capital Enterprises Inc., violated the state Consumer Fraud Act and advertising regulations through bait-and-switch tactics in advertisements that consumers could earn “up to $5,000 or more weekly” by stuffing envelopes and mailing letters, and “$2,500 or more weekly” by assembling booklets.
The state alleges that after consumers paid registration fees to Brookman and Capital Enterprises, Bookman and his business then changed the terms and conditions of their work-at-home programs to require additional undisclosed payments and fees.
Capital Enterprises does business as Maxwell Scott Enterprises, Maxwell Scott, David Gates Enterprises, and Warner Daniel. The state’s complaint alleges that David Gates is an alias used by Brookman.
“Roadside utility poles across New Jersey are covered with offers to earn money while working at home,” state Attorney General Paula T. Dow said Wednesday. “These offers sound too good to be true, and as our investigation and others across the country found, they often are scams that only enrich the con artists who perpetrate them.”
The state is seeking restitution for consumers, along with imposition of civil penalties and reimbursement of attorneys’ fees and costs and Bookman’s compliance with the state’s consumer protection laws and regulations.
The lawsuit, which is being transferred to Superior Court in Morristown, alleges that the Bookman and his company engaged in unconscionable commercial practices and used deception, false pretenses, false promises and misrepresentations to defraud consumers. The defendants allegedly also knowingly omitted material facts when soliciting consumers and engaged in bait-and-switch tactics.
For example, Bookman allegedly failed to disclose to consumers prior to their payment of the registration fee for the booklet assembly work-at-home program that the stated income potential for assembling booklets only applied if the consumer, at the individual’s own expense, advertised and marketed the very booklets they were to assemble.
“Consumers caught in the current economic downturn are particularly vulnerable to supposed money-making opportunities, such as the work-at-home scheme alleged in this case,” state Acting Consumer Affairs Director Thomas R. Calcagni said. “The consumers ended up worse off, with money out of their pockets that ended up in Brookman’s wallet. We’re committed to stopping scam artists who perpetrate work-at-home schemes from preying on New Jersey residents.”
Consumers can file complaints with the division by using the forms available at http://www.njconsumeraffairs.gov or by calling 1-800-242-5846 or 973-504-6200.
Deputy Attorney General Jah-Juin Ho in the Consumer Fraud Prosecution Section is handling the lawsuit. Investigator Kelly Fennell in the Office of Consumer Protection conducted the investigation.
-TOM HESTER SR., NEWJERSEYNEWSROOM.COM