Brown puts spotlight on growing list of scams

By Legal News Line | Mar 30, 2009

Jerry Brown (D)

LOS ANGELES (Legal Newsline) - California Attorney General Jerry Brown says he is increasingly dealing with financial scams seeking to victimize those most hurt during this economic recession.

In a congressional hearing on Saturday, Brown said his office will continue efforts to investigate and prosecute businesses excessively charging struggling homeowners.

"We have lawyers, we have investigators, and we will go after those who break the law by falsely representing what the can do," Brown said.

The attorney general said his investigators are monitoring potentially fraudulent "mass media" appeals to consumers.

"We will document the rip-offs that are over the mass media as best we can," he said.

This follows earlier announcements from the attorney general's office expressing concern about tax-filing scams and work-at-home scams. In the past month, the attorney general's office has released several press releases regarding financial settlements or criminal charges relating to financial schemes.

Scott Gerber, director of communications for the attorney general's office, said the state has also seen a rise in scams touting ways people can earn money from home.

"We're seeing unscrupulous scam artists who are taking advantage of the economic downturn and trying to con people out of their hard-earned dollars," he said.

This follows an announcement last week that Brown had hit two online companies, Imergent Inc. and StoresOnline, with millions in financial penalties for making bogus promises of "full-time income."

Brown's office on Friday announced the arrest of a California businessman who kept more than $50,000 from students booking spring break trips that cancelled. The owner of Big Bad Student Travel, Abel Moses Somileda, was charged with numerous counts of theft and failure to deliver on ticket or voucher.

On March 19, Brown arrested two "scam artists," according to the press release issued by his office that "coldly and heartlessly preyed on Californians desperate for help in saving their homes," he said. The state filed 49 felony counts against two women for offering non-existent loan-modification services.

The next day Brown announced a multi-million dollar lawsuit aimed at medical testing laboratories that had been grossly overcharging Medi-Cal customers for diagnostic tests.

Then on March 23, Brown announced a settlement to reimburse consumer who were ripped off in a statewide home repair scheme, where unqualified workers would perform shoddy work and charge far more than the original quote from customers.

Even Los Angeles sports icon Magic Johnson is not exempt as a potential target in Brown's efforts to protect consumers. A report by the Seattle Post Intelligencer stated Jackson Hewitt, a tax preparation company Johnson promotes is preying on the poor by charging exorbitant rates for the promise of fast money on tax returns.

California has previously sued Jackson Hewitt, along with H&R Block and Liberty Tax Service, the country's three largest tax preparation businesses, for deceiving customers by selling them fast-money loans with massive fees.

Brown told the newspaper in a phone interview that "people should be alert for the high charges entailed with these so-called tax loans. These anticipation payments come with a relatively high price. Consumers should have their eyes open."

It's a phrase Brown is using more often than ever in these troubled financial times as he continues to wage his legal fight on numerous fronts.

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