Defendants in Office Supply Scheme to Pay More than $2 Million for Consumer Redress

The Federal Trade Commission has reached an agreement to settle all claims arising out of a civil contempt action against American Business Supplies, Inc., Interstate Office Systems, Inc., Nationwide Office Products, Inc., Michael Chierico and Teri Chierico. The FTC alleged that the defendants violated a 1996 order involving the deceptive telemarketing of office supplies. The Chiericos have agreed to transfer over $2 million in assets, including their million dollar home, to the FTC for consumer redress as part of the settlement. The settlement also bans Michael Chierico from any future telemarketing.

In June 1998, a U.S. District Court in Miami found American Business Supplies, Inc., Interstate Office Systems, Inc., Nationwide Office Products, Inc., and Michael and Teri Chierico in civil contempt for violating a 1996 consent judgment. The 1996 judgment resolved allegations that the defendants had deceptively marketed office supplies and imposed restrictions on future telemarketing activities. The Commission alleged in its 1998 contempt motion that after entry of the 1996 judgment, the defendants resumed the same deceptive practices that they had agreed to discontinue. Among other things, the Commission alleged that the defendants misrepresented that they were consumers' regular supplier of photocopier toner, the price of their merchandise, and that consumers had agreed to order supplies from them. The District Court's contempt order banned the Chiericos from any future telemarketing and ordered them to pay consumer redress. In March 2000, the U.S. Court of Appeals for the Eleventh Circuit affirmed the 1998 contempt order as to Mr. Chierico and the three corporate defendants and vacated the order as to Mrs. Chierico.

The Stipulated Order and Settlement of Claims resolves all outstanding claims between the FTC and the Chiericos regarding the ownership and control of the Chiericos' assets as a result of the Eleventh Circuit opinion. The settlement requires the Chiericos to transfer certain assets to the FTC, including title to their home. After liquidation of the home and all other assets, the approximately $2 million will be used for consumer redress. The settlement confirms that Michael Chierico is permanently banned from any future telemarketing, in accordance with the 1998 contempt order, and that Teri Chierico remains subject to the requirements of the 1996 consent judgment. Mrs. Chierico entered into the present agreement to facilitate settlement of the litigation against Michael Chierico and the corporate defendants.

Copies of the stipulated order and settlement of claims, as well as previous documents pertaining to this case, are available from the FTC's web site at http://www.ftc.gov and also 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 in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357). The FTC enters Internet, telemarketing and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies worldwide.

(FTC Matter No. X960074)
(Civil Action No. 96-1754-Civ-Moore (S.D. Fla.)