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Executives Facing Jail Time for Auto Warranty Scam

Two executives with a Florida-based telemarketing company admit selling bogus auto-service warranties in a scheme federal prosecutors say victimized 15,000 consumers of nearly $40 million over a two-year span.

Christopher Cowart of Fort Lauderdale, Fla., and Cris Sagnelli of Boca Raton, Fla., pleaded guilty Monday in U.S. District Court in East St. Louis to a felony count of using a fictitious name while doing business as Transcontinental Warranty.

They each face up to 10 years in prison when sentenced March 21.

This appears to be an extension of the action taken by the FTC as announced previously below.

American consumers won’t be getting any more deceptive robocalls from the auto “warranty” company that bombarded them with millions of the prerecorded calls earlier this year, under a proposed settlement with the Federal Trade Commission.

The company, Transcontinental Warranty, Inc., and its owner will be permanently banned from making any prerecorded calls like the ones it used previously to trick consumers into buying vehicle service contracts under the guise that they were extensions of original vehicle warranties.

“The FTC has taken legal action to put an end to this company’s deceptive and harassing robocalls,” said Jon Leibowitz, Chairman of the FTC. “Starting today, the Commission will be going even further, enforcing a new rule adopted a year ago that makes these prerecorded commercial calls illegal.”

Transcontinental Warranty is one of several companies behind the auto warranty scam that the FTC sued in response to a flood of complaints about the robocalls, which used random, prerecorded voice messages to deceive consumers into thinking that their vehicle warranties were about to expire. The agency also has filed a complaint against the telemarketers who made the prerecorded calls, Voice Touch, Inc., Network Foundations, LLC, and Voice Foundations, LLC, as well as their three principals. That case is still pending in federal court. The court has barred the defendants from making any further deceptive robocalls until the litigation is resolved.

READ  Auto Warranty Robocaller To Pay $2.3 Million, Sell Mercedes For Consumer Redress

Under the proposed settlement announced today, Transcontinental and its owner, Christopher Cowart, will be barred from the deceptive tactics they used to sell its vehicle service contracts. The defendants also will be prohibited from selling Transcontinental’s customer lists or trying to collect money from people who were victimized by the scam. In addition, they will be required to cooperate in the FTC’s ongoing investigation of the related case. The proposed settlement includes a $24 million judgment against the defendants, which is suspended because of their inability to pay. If the defendants have lied about their assets, the order requires them to pay the full judgment.

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Steve Rhode

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