Court Sticks Envelope-Stuffing Pitchman with Civil Contempt Judgment

The Federal Trade Commission today announced that a civil contempt judgment was entered against Mark E. Shelton, a defendant who was previously ordered to stop an envelope-stuffing scam in 2004. The contempt judgment held that Shelton violated the 2004 court order by continuing to deceptively market and sell envelope-stuffing, work-at-home opportunities to consumers. Under the judgment, Shelton has been held liable for $1.49 million in consumer harm and permanently banned from participating in any work-at-home, employment, business, or investment opportunities in the future.

The Commission today also announced the filing of a complaint against four individuals and three companies that operated the Illinois-based envelope-stuffing scheme with Shelton.

The Contempt Action

The Commission’s original complaint, filed in December 2003, alleged that Mark E. Shelton and his two businesses sold envelope-stuffing, work-at-home opportunities by making false earnings claims. On November 23, 2004, the court approved a stipulated final order that banned the defendants from promoting work-at-home opportunities and required them to pay $420,000 for consumer redress.

On November 15, 2005, the Commission filed a motion for civil contempt sanctions against Shelton for continuing to market and sell work-at-home opportunities in violation of the 2004 order. According to the FTC, Shelton continued to falsely promise consumers that they would earn substantial income by stuffing envelopes and mailing brochures from home.

On February 7, 2006, the court entered a stipulated order that held Shelton in civil contempt for violating the 2004 order. Following a hearing to determine the amount of injury caused by Shelton’s fraudulent business activities, the court found Shelton liable for $1,493,793 in consumer harm. In a ruling issued on April 25, 2006, the court found that the FTC had established by “clear and convincing evidence” that Shelton violated the prior order and ordered him to pay $1.49 million. At the Commission’s request, the court modified the 2004 order to ban Shelton from not only promoting work-at-home opportunities, but also to ban him from participating in any employment, business, or investment opportunities.

The Commission’s New Complaint

At the same time the Commission filed its civil contempt action against Shelton, it also filed a complaint against the other individuals and entities involved in Shelton’s envelope-stuffing scheme. The complaint names Shelton, Jeremy Wilson, individually and d/b/a Pure Home Air Profits, Robert M. Gomez, Luis D. Aviles, and Wholesale Marketing Group, LLC as defendants. At the FTC’s request, the court issued a temporary restraining order that prohibits the allegedly illegal conduct and freezes the defendants’ assets. The Commission subsequently filed an amended complaint in April 2006, naming Wholesale Marketing Group, Inc. and Carl J. Shelton, Jr. as defendants in this matter, as well as Marianne Shelton, Julie Shelton, and M. Edward Shelton Hypnotherapy, LLC as relief defendants. Litigation against these defendants continues.

The Commission vote to authorize the filing of the amended complaint was 5-0. It was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division.

Consumer Education

The FTC advises consumers interested in working at home to beware of scams and to ask the following questions of anyone promoting a work-at-home opportunity:

• What tasks will I have to perform? (Ask the program sponsor to list every step of the job.)
  
• Will I be paid a salary or will my pay be based on commission?
  
• Who will pay me?
  
• When will I get my first paycheck?
  
• What is the total cost of the work-at-home program, including supplies, equipment, and membership fees? What will I get for my money?

The FTC’s consumer education brochure also warns consumers about particular types of scams involving medical billing; envelope stuffing; and assembly or craft work. For more information, see “Work at Home Schemes,” available at http://www.ftc.gov/bcp/conline/pubs/invest/homewrk.htm.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant actually has violated the law. The case will be decided by the court.

Copies of the legal documents associated with these cases 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 in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to thousands of civil and criminal law enforcement agencies in the U.S. and abroad.