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Personal Government Grants Scheme Exposed

The Federal Trade Commission, along with four state attorneys general, has shut down a fraudulent operation that allegedly took advantage of financially distressed consumers by falsely promising them a “guaranteed” $25,000 grant from the federal government. Several defendants have agreed to court orders settling the FTC and state charges, which bar all of them from the alleged deceptive conduct, ban some of them from certain types of marketing, and will result in judgments requiring them to pay hundreds of thousands of dollars in consumer refunds.

In its July 2009 complaint, the FTC, jointly with the Attorneys General of Kansas, Minnesota, and North Carolina, charged that Grant Writers Institute, LLC and several related entities and individuals falsely told consumers that they were eligible for grants from the federal government. The complaint alleged that the defendants’ false and deceptive claims that consumers are guaranteed or highly likely to receive grants violated federal law, state consumer protection laws, and the FTC’s Telemarketing Sales Rule. The Attorney General of Illinois subsequently joined the action.

According to the complaint and a subsequent amended complaint, since at least 2007, Grant Writers Institute made its phony pitch using postcards that it mass mailed to consumers across the country. Consumers were told they were entitled to $25,000 in free government grant money, guaranteed. Consumers who called a phone number on the card were pitched a $59 book titled “Professional Grant Writer ‘The Definitive Guide to Grant Writing Success.’”

The complaint charged that the defendants then called consumers who bought the book, trying to get them to pay hundreds of dollars or more for grant research, writing, or coaching services, falsely claiming a 70 percent success rate in securing grant funding for individuals.

The FTC and the states reached five settlement orders resolving charges against defendants James Rulison, Jordan Sevy, Brett Blackman, Justin Ely, Alicia Nossov, Wealth Power Systems, and Aria Financial Services. Under the settlement orders:

  • Rulison and Sevy are banned from marketing money-making opportunities; and prohibited from misleading consumers, making unsubstantiated claims, or failing to make material disclosures in connection with the sale of any goods or services. They also are prohibited from violating relevant state laws and the FTC’s Telemarketing Sales Rule, and subject to a judgment of $27 million, which will be suspended due to their inability to pay.
  • Blackman and Ely are subject to the same prohibitions as Rulison and Sevy. In addition, under the settlement orders, they are permanently banned from telemarketing. Blackman is subject to a judgment of $27 million, and Ely to a judgment of $3.4 million; both judgments are suspended due to their inability to pay.
  • Alicia Nossov is barred from making misrepresentations related to the marketing and sale of any goods or services, and from violating the Telemarketing Sales Rule. She is subject to a judgment of $5.5 million, which will be suspended upon payment of $126,894.
  • Wealth Power Systems and Aria Financial Services are banned from marketing grant-related products and using grant leads, prohibited from making misrepresentations, and required to substantiate any claims related to the sale of any goods or services. They also are prohibited from violating the FTC’s Telemarketing Sales Rule and related state consumer protection laws. The order imposes a $3.4 million monetary judgment, which will be suspended if they pay $265,000.

The suspended judgments against Rulison, Sevy, Blackman, Ely, Wealth Power Systems, and Aria Financial Services will become immediately due if any of them is found to have materially misrepresented any financial assets.

In addition, in late July 2011 the court entered default judgments against the following six defendants in the case: Apex Holdings International, L.L.C.; Affiliate Strategies, Inc.; Landmark Publishing Group L.L.C. (d/b/a G.F. Institute and Grant Funding Institute); Grant Writers Institute, L.L.C.; Answer Customers, L.L.C.; and Direct Marketing Systems, Inc.

Each of these corporations is banned from marketing money-making opportunities, and from telemarketing. They also are prohibited from making misrepresentations when offering products for sale, and required to substantiate claims and disclose information such as fees, costs, and terms and conditions related to any cancellation or refund policy. The court also imposed a $27.2 million judgment against the first five default defendants and a $3.4 million judgment against Direct Marketing Systems to pay refunds to defrauded consumers, but the companies have no assets.

Finally, the court has entered a summary judgment opinion against telemarketer Real Estate Buyers Financial Network LLC (REBFN) and against its president, Martin Nossov. The court order bars REBFN and Martin Nossov from the conduct alleged the complaint. The court entered a permanent injunction that prohibits these defendants from future violations as alleged in the complaint, and, on August 24, 2011, entered a monetary judgment against them for $5,373,106.

Personal Government Grants Scheme Exposed
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • AlCapone

    You would think the government might stick to shutting down scams which are actually STILL in operation! So, with $100,000,000 in fines, they are hoping to get almost $400,000?! 

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