Yep, rolling over on the family. Finally
Exec Hit With $25M Judgment In FTC Credit Card Scam Suit
By Brian Mahoney
Law360, Washington (June 09, 2014, 6:03 PM ET) -- An executive at a company that allegedly scammed more than 1.5 million credit and debit card consumers out of $43 million has agreed to be subject to a $25 million judgment and to cooperate in an ongoing Federal Trade Commission investigation into the company.
Attorneys for the FTC filed a joint stipulation in Nevada federal court June 5 between the government and Ideal Financial Solutions Inc. executive Shawn Sunyich, who was named a defendant in an agency suit against the company.
The FTC accuses Ideal of posing as a lender to buy payday loan applications completed by consumers, only to use information from those applications to charge consumer accounts without authorization.
As part of the deal, Sunyich is enjoined from collecting a consumer's account number or a similar identifier or assisting others in collecting such information.
According to the FTC, Sunyich was the director of business development at Ideal FSI, a company subsidiary. The government claims that he signed falsified merchant account applications and legal documents on behalf of shell companies established to facilitate the scam.
Although Sunyich knew that the legal documents contained misrepresentations, he signed them nonetheless, "knowing that Ideal needed new shell companies to acquire merchant account in order to replace the accounts processed terminate for high chargeback and return rates," the FTC said.
The FTC first filed suit against Ideal in 2013. The commission said the company targeted poor consumers who had never contacted them, debiting their bank account and charging their credit cards for about $30.
When consumers complained to the company, they were told that they had purchased financial counseling or loan matching services or assistance in completing a payday loan applications.
The defendants allegedly ran more than 50 billing campaigns as part of the scheme.
Due to high return rates from consumers disputing the charges, some payment processors terminated Ideal's merchant account. To handle the increasing number of complaints, the company established call centers, but its operators told consumers that they had no information about why they were charged.
Thursday's deal required no admission of liability from Sunyich.
According to court records, Sunyich is now obligated to provide information, evidence and testimony for the FTC as part of the ongoing case.
“It is further ordered that defendant must fully cooperate with representatives of the commission in this case and in any investigation related to or associated with the transactions or the occurrences that are the subject of the complaint,” the stipulation said.
The defendants named in the original suit are Ideal, Ascot Crossing LLC, Bracknell Shore Ltd., Chandon Group LLC, Avanix LLC, Fiscal Fitness LLC, Steven Sunyich, Michael Sunyich, Christopher Sunyich, Melissa Sunyich Gardner and Kent Brown.
Representatives for Sunyich were not immediately available for comment on Monday.
Counsel information for the parties was not immediately available.
The case is Federal Trade Commission v. Ideal Financial Solutions Inc., case number 2:13-cv-00143, in the U.S. District Court for the District of Nevada.
--Editing by Andrew Park.
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