Canadian House of Cards Continues to Fall, as Bogus Biller Settles FTC Charges

The Federal Trade Commission today announced the issuance of a stipulated final court order against Emma G. Wanjiku, a Kenyan citizen and Canadian resident who participated in a wide-ranging scheme to trick U.S. consumers into paying for bogus business and travel directory advertisements and listings, office supplies, and consulting services they never authorized, ordered, or received.

Under the terms of the order, Wanjiku, the ex-wife of the now-jailed ringleader of the Canadian defendants, has been barred from making the claims alleged in the Commission’s complaint and is subject to a $4 million judgment that will become due if she is found to have misrepresented her financial condition. The Commission previously settled similar charges against another individual and corporate defendant in the case, with the court imposing similarly strong injunctive and monetary relief.

The Commission’s Complaint

The FTC’s complaint, announced in October 2006, charged the defendants with operating under bogus business names, including American Register of Manufacturers, International Industrial Trade Directory, National Register, Official Register of Commerce and Industry, Traders International Trade Directory, Hotel & Conventions International, Hotel & Resorts International, Hotel Index, International Hotel & Accommodations Directory, International Hotel Index, Official Hotel & Resort Guide, Bradley Siddons & Associates, and Foremost Business Supplies.

According to the FTC, the defendants’ invoices for business and travel directory advertising included actual print advertisements that U.S. businesses had placed in legitimate publications such as the Thomas Register of American Manufacturers, Hotel & Travel Index, and the Officials Meeting Facilities Guide. The defendants allegedly cut ads from those publications and pasted them onto their own bogus invoices to deceive consumers into paying the bills. The FTC charged that in many instances consumers paid the bogus bills, which rangedfrom a few hundred dollars to several thousand dollars, not realizing that the listings and advertising were unauthorized. The FTC also alleged that the defendants charged for office supplies or consulting services that had not been ordered and were never received.

Based on these allegations, the FTC charged the defendants with violating Section 5 of the FTC Act by misleading consumers into believing they owed money for advertising and other products and services that were not ordered and never delivered.

The Court Order

The final court order announced today against defendant Emma G. Wanjiku contains strong injunctive relief to ensure that she does not engage in similar deceptive conduct in the future. It prohibits her from misrepresenting that consumers have a preexisting business relationship with her or that they have agreed to buy – or owe any money for – the products and services shown on invoices sent to them. Next, the order bars her from making any material misrepresentation in connection with the sale of any good or service, prohibits her from collecting on any outstanding invoices, and prohibits her from selling, leasing, or otherwise making money by selling her customer lists.

The order also requires her to cooperate with the FTC in its ongoing case against her ex-husband and contains standard monitoring and record keeping provisions to ensure her compliance with its terms. Finally, while Wanjiku lacks the funds to provide for consumer redress, the order contains a $4 million judgment against her that would become due if she is found to have misrepresented her financial condition.

The order settles the FTC’s case against Wanjiku, one of the final defendants in this matter. The last defendant, Wanjiku’s ex-husband, Michael Robert Petreikis, was arrested by the Toronto Police Service in August 2006 and pleaded guilty to Canadian criminal charges. Petreikis was recently released from jail in Canada and is currently incarcerated in the United States for violation of an earlier probation order. The FTC’s litigation against him continues.

This case was brought with the assistance of the U.S. Postal Inspection Service and the Toronto Strategic Partnership. The Toronto Strategic Partnership consists of the FTC, Competition Bureau Canada, the Toronto Police Service – Fraud Squad, the U.S. Postal Inspection Service, the Ontario Ministry of Government Services, the Ontario Provincial Police – Anti-Rackets, the Royal Canadian Mounted Police, and the United Kingdom’s Office of Fair Trading. The FTC also received invaluable assistance in this matter from the Better Business Bureau Serving Mid-Western and Central Ontario.

The Commission vote authorizing the filing of the stipulated final order against Emma G. Wanjiku was 4-0. It was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division.

NOTE: This stipulated final order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

Copies of the stipulated final order are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click: http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.