FTC sues an online scam network of government-grant quasi-promoters

A lawsuit against nationwide scam scheme that defrauds millions of Americans under guise of governmental help was filed by the US Federal Trade Commission. The regulators has asked a court to stop a "far-reaching" Internet enterprise that allegedly made millions of dollars by luring customers into trial memberships for bogus government grants and money-making schemes, then repeatedly charging them monthly fees for memberships they never ordered.

The FTC filed a lawsuit with the US District Court for the District of Nevada against the Utah-based company I Works, owner Jeremy Johnson, nine other people, nine other companies and 51 shell companies. The FTC filed the lawsuit, asking the court to halt the business practices and refund customer fees, on Tuesday.

"No consumer should be sucker-punched into making payments for products they don't know about and don't want," FTC Chairman Jon Leibowitz said in a statement.

The orchestrators behind the business offer consumers fake money-making and government-grant opportunities through a number of front websites saying the offers are free or risk free, the FTC said in a news release. The companies promise to charge customers only a small shipping and handling fee of US$1.99 to $2.99, the FTC said.

Soon after the deceived customers provide their billing information I Works charges them with one-time fees of up to $129.95 and monthly recurring fees of up to $59.95, the FTC said.

The FTC charged the defendants with violating the FTC Act by misrepresenting that government grants are available for paying personal expenses, that consumers are likely to obtain grants by using the defendants' program, that users of their money-making products will earn substantial income and that their offers are free or risk free.