UNITED STATES OF AMERICA
In the Matter of
1554 CORPORATION, a
DOCKET NO. C-3733
The Federal Trade Commission, having reason to believe that 1554 Corporation, a corporation, and Brainerd L. Mellinger, III, individually as an officer of 1554 Corporation ("respondents"), have violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, alleges:
PARAGRAPH ONE: Respondent 1554 Corporation is a California corporation, with its office and principal place of business located at 6100 Variel Ave., Woodland Hills, CA 91367. Respondent 1554 Corporation has traded and done business as The Mellinger Company.
Respondent Brainerd L. Mellinger, III, is president of the corporate respondent. Individually, or in concert with others, he formulates, directs and controls the acts and practices of the corporate respondent, including the acts and practices alleged in this complaint. His principal office or place of business is the same as that of the corporate respondent.
PARAGRAPH TWO: Respondents have, individually or in concert with others, created and disseminated advertisements for the Mellinger World Trade Mail Order Plan ("Mellinger Plan"), and have offered for sale and sold the Mellinger Plan to consumers who respond to their advertisements.
PARAGRAPH THREE: The acts and practices of respondents alleged in this complaint have been in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act.
PARAGRAPH FOUR: Respondents' advertisements for the Mellinger World Trade Mail Order Plan include, but are not necessarily limited to, the attached Exhibits A-D. These advertisements contain the following statements:
A. A program-length television advertisement for the Mellinger Plan, identified as "Mellinger's Secret Treasures" (Exhibit A):
B. A magazine advertisement for the Mellinger Plan
2 valuable New Reports Can Make You Rich! I'll send both to you FREE! You've seen me on T.V.! Now I'm ready to help you get a fast start! Discover How to Be Independent -- Be Your Own Boss -- Make Big Money in your own IMPORT/EXPORT MAIL ORDER BUSINESS! . . . Enjoy earnings probably far greater than you ever dreamed any job could pay.
* * *
Join these successful Men and Women! . . .
"Mellinger has the answers! I'm looking at $25,000. year's income -- just 2 hours a day part-time." [endorser]
"Just one world trade transaction paid me $5,000 profit! Yes...follow the Mellinger Plan!" [endorser]
C. Mellinger Internet site (http://www.tradezone.com) (Exhibit C):
SUCCESSFUL INTERNATIONAL TRADERS MEMBERS[.] HOW PLAN BROUGHT SUCCESS TO THEM! . . .
Having trouble sleeping one night, [endorser] turned on his TV and became enthralled by a Mellinger infomercial. A phone call brought him full details about the Mellinger Plan. "I was so impressed with what I saw, I immediately began following the Mellinger Plan and became a Member of International Traders. I began putting the Plan into practice and started showing Import products. In less than two months, I had generated well over $2,000 in business." . . .
The Mellinger Plan provided exactly what [endorser] needed. . . . "I would tell you this works for you. It's very good for beginners like myself." She reported sales of $1200. right away and with her early momentum she says she is looking now at earnings of $6000. a month!
D. A pamphlet mailed to consumers who request information about the Mellinger Plan (Exhibit D):
START AT HOME...make money your very first day!
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MEN & WOMEN--Welcome to your exciting, high-income, full-or part-time future in Import/Export/Mail Order. Follow the Mellinger Plan as it guides your every step. Nothing has been left to chance. Each easily followed step is based 100% upon many years of successful business experience!
* * *
SUCCESS STORIES in World Trade! Read these ACTUAL REPORTS of MONEY-MAKING . . . .
Concentrating on imported sports equipment, [endorser]
took in $35,000.00 the first year, devoting only a few
hours a day.
PARAGRAPH FIVE: Through the use of the statements contained in the advertisements and promotional materials referred to in PARAGRAPH FOUR, including but not limited to the advertisements attached as Exhibits A-D, respondents have represented, directly or by implication, that:
PARAGRAPH SIX: Through the use of the statements contained in the advertisements referred to in PARAGRAPH FOUR, including but not necessarily limited to the advertisements attached as Exhibits A-D, respondents have represented, directly or by implication, that at the time they made the representations set forth in PARAGRAPH FIVE, respondents possessed and relied upon a reasonable basis that substantiated such representations.
PARAGRAPH SEVEN: In truth and in fact, at the time they made the representations set forth in PARAGRAPH FIVE, respondents did not possess and rely upon a reasonable basis that substantiated such representations. Therefore, the representation set forth in PARAGRAPH SIX was, and is, false and misleading.
PARAGRAPH EIGHT: The acts and practices of respondents as alleged in this Complaint constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.
THEREFORE, the Federal Trade Commission this fourteenth day of April, 1997, has issued this complaint against respondents.
By the Commission.
Donald S. Clark
[Exhibits A-D are attached to paper copies of the complaint, but are not available in electronic form.]