According to an earlier press release, the defendants operated multiple companies through which they falsely claimed the could settle taxpayers' back taxes for "pennies on the dollar" or only a "fraction" of what the taxpayers owed. These claims often were made before the defendants and their companies analyzed a taxpayer's financial and tax situation. The FTC and the State of Nevada alleged that the defendants mailed deceptive and threating letters that impersonated federal, state, and local governments to solicit calls from the targets of the letters. When taxpayers called, operators answering the call on behalf of the defendants and their companies also made false claims about tax debt relief. Taxpayers were also reached by telemarketing calls made by the defendants or their companies. Taxpayers were told that they were being investigated by tax authorities such as the IRS or that their accounts had been "red flagged" by those authorities or marked as "high risk." When taxpayers agreed to pay for the services offered by the defendants and their companies, the defendants and their companies did little, if any, of what they promised, and rarely, if ever, obtained the promised results. When taxpayers dissatisfied with what was done (or not done) asked for refunds of what they paid they were ignored.
The FTC charged the defendants and their companies with impersonating the government including local, state, or federal tax authorities, making false promises that they could reduce consumers’ tax debt, and violating the FTC’s Telemarketing Sales Rule requirements by making misrepresentations in telemarketing calls. The FTC alleged that the conduct in question violated the FTC Act, Gramm-Leach-Bliley Act, the Telemarketing Sales Rule, and the Impersonation Rule. The State of Nevada alleged that ATS’s conduct also violated Nevada law. The FTC filed a complaint against the individual defendants and nine affiliated companies.
Under the proposed settlement, the individual defendants will be required to pay $77.7 million, the amount they took from taxpayers from February 2022 to 2025. Except for the approximately $8 million cash and other surrendered assets, the full judgment is suspended based on the defendants’ inability to pay. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition. The settlement becomes binding once approved by the court.
Tax debt relief scams are just one tiny portion of the many scams that afflict people every day. Scams ultimately are designed to move money and assets from gullible, careless, or inattentive victims to those who want to make a "quick buck" the easy way. If it's not a call by someone pretending to be the IRS or a state revenue department claiming that the person owes taxes and needs to pay, it's someone pretending to be a grandchild looking for a payment from a grandparent, or someone pretending to represent a health care provider trying to get a Medicare number in order to siphon funds from the federal government, or someone offering some service in an attempt to get identifying information in order to drain a bank account or open credit in the victim's name. For every wrongdoer identified and stopped by law enforcement, there are dozens who go uninvestigated, or unidentified, or unpunished. Would these scammers not be better targets for the use of law enforcement resources rather than somw of what is currently being targeted?
