Defendants Settle with FTC in Surplus Goods Business Opportunity Scam

Scammers who duped consumers into paying a total of more than $30 million for bogus business opportunities have settled Federal Trade Commission charges that their deceptive claims violated federal law. The settlements prohibit future violations by the defendants, who promised consumers that they would receive access to overstocked merchandise, expert training in the surplus goods industry, and substantial income.

The FTC sued the defendants in February 2005 as part of “Project Biz Opp Flop,” a crackdown on deceptive business opportunity and work-at-home schemes. The settlements entered last April ban the defendants from the business opportunity and franchise industries and prohibit them from misrepresenting any goods or services. The settlement orders also bar the defendants from selling or otherwise benefitting from personal information about customers who paid them before the orders were entered. In addition, the orders impose a $30.7 million judgment, which is suspended based on the defendants’ inability to pay. The full judgment will be imposed if they are found to have misrepresented their financial condition. The settlements also contain standard record-keeping and reporting provisions to allow the FTC to monitor compliance.

The defendants are Sheldon and Judith Takala Fidler and nine companies they controlled: World Traders Association, Inc., United Traders Association, Inc., International Merchandise Group, Inc., Trans-Global Connections, Inc., Musketeer Partners, Inc., Fulfillment Options, Inc., International Associates Worldwide, Inc., Magna Delta, LLC, and Office Options, LLC. The Commission vote authorizing the filing of the stipulated judgments and orders for permanent injunction was 4-0. The orders were entered by the U.S. District Court for the Central District of California, Western Division. Four other defendants previously settled FTC charges related to this scheme.

In March 2007, in a related criminal proceeding instituted by the United States Attorney’s Office for the Central District of California, Sheldon Fidler pleaded guilty to two counts of mail fraud and received a 60-month prison sentence; he is currently in jail. Judith Fidler pleaded guilty to one count of criminal contempt and received two years of probation.

NOTE: Stipulated court orders are for settlement purposes only and do not necessarily constitute an admission by the defendants of a law violation. Stipulated orders have the force of law when signed by the judge.

The Federal Trade Commission works for consumers 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, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

(FTC File No. X050021)
(World Traders)