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Richard Canicatti, one of two defendants sued by the Federal Trade Commission over their role in an allegedly deceptive telemarketing scheme that preyed on elderly consumers who had lost money to fraudulent sweepstakes or prize-promotion promoters, has agreed to settle the FTC allegations against him. The FTC charged that the defendants misrepresented to victims of previous telemarketing frauds that they would recover the money lost, had been successful in recovering such lost money for consumers, and were cooperating with regulatory authorities, such as the FTC, to help recover lost money. The settlement would permanently prohibit Canicatti from making similar misrepre- sentations and from falsely representing any fact material to a consumer's decision to purchase recovery services he offers or any good or service he telemarkets.

The settlement stems from FTC charges filed in federal district court in October 1994 against Richard Canicatti, doing business as Refund Information Services (RIS), and Joe Colon, also known as Joe Colone and Steven Randolph Tinsley. (The court entered a default judgment against Colon on May 19, 1995.) Both defendants reside in Las Vegas. The FTC alleged that the defen- dants contacted consumers throughout the United States who had been victims of previous fraudulent sweepstakes or prize- promotion schemes, and told them that RIS was in the business of recovering money consumers had lost to telemarketing companies for a fee. RIS sometimes stated that it had obtained the consumers' names from government agencies, or that RIS was working with government agencies to get the money back for consumers, according to the FTC. The complaint alleged that RIS did not, in fact, have any special relationship with government agencies, such as the FTC, that are engaged in obtaining refunds or recovering money for telemarketing victims. The complaint also alleged that contrary to its representations, RIS rarely, if ever, recovered lost money for consumers.

In addition, the complaint alleged that defendant Colon falsely represented to certain consumers that he was already holding a check payable to them.

Under the proposed consent judgment to settle the FTC charges against him, Canicatti would be prohibited from misrepresenting:

  • that money previously lost by a consumer, or a prize that was never received from a firm engaged in telemarketing, has been or will be recovered;
  • his success in recovering money previously lost by consumers to firms engaged in telemarketing, or the success in recovering prizes that consumers never received from firms engaged in telemarketing;
  • that he is cooperating with any governmental agency such as the FTC to recover money or prizes for victims of telemarketing frauds; or
  • that any money or prize is being held for a consumer who lost money, or who never received a promised prize, from a firm engaged in telemarketing.

In addition, the settlement would prohibit Canicatti from misrepresenting any other fact material to a consumer's decision to purchase recovery services. Also, in connection with tele- marketing, Canicatti would be prohibited from falsely repre- senting any fact material to a consumer's decision either to purchase any good or service, including but not limited to any recovery service, or to donate to a charity.

The proposed settlement also includes various recordkeeping provisions designed to assist the FTC in monitoring Canicatti's compliance.

The Commission vote to authorize staff to file the proposed settlement was 5-0. The stipulated final order and judgment was filed in the U.S. District Court for the District of Nevada, in Las Vegas, 06/08/95, and requires the court's approval to become binding.

The FTC received assistance in the case from the U.S. Attorney's Office and the Federal Bureau of Investigation in Nevada.

NOTE: This judgment is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent judgments have the force of law when signed by the judge.

Copies of the final judgment, and other documents associated with this case, are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue N.W., Washington, D.C. 20580.

(FTC File No. 942 3285)

(Civil Action No. CV-S-94-00859-HDM-(RLH))

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