iWorks advertises itself as an Internet marketing firm. The Federal Trade Commission calls it an Internet scamming operation and is taking the company, and its 51 shell companies, to court to shut it down.
The FTC charges that iWorks, a Utah-based firm owned and operated by Jeremy Johnson and nine associates, has made millions of dollars by luring consumers into 'trial' membership for bogus government-grant programs and various money-making schemes.
Once a duped consumer gives up his or her credit card number, iWorks, which represents its services as free and risk-free, starts charging fees to the consumer -- sign-up fees, monthly fees and membership fees for programs the consumer did not consent to join.
The FTC alleges that the company deceptively enrolls unwitting consumers into memberships for products or services and then repeatedly charges their credit cards or debits funds from their checking accounts without consumers' knowledge or authorization for memberships the consumers never agreed to accept.
No consumer should be sucker-punched into making payments for products they don't know about and don't want, said FTC Chairman Jon Leibowitz.
Leibowitz said that once iWorks and other conspiring websites get the consumers' billing information, they are charged hefty one-time fees of up to $129.95 and monthly recurring fees of up to $59.95 for the grant or money-making programs. I Works charges them additional monthly fees for one or more unrelated programs that consumers did not agree to.
The FTC further charges that iWorks scam has caused hundreds of thousands of consumers to seek chargebacks - reversals of charges to their credit cards or debits to their banks accounts.
The high number of chargebacks has landed the defendants in VISA's and MasterCard's chargeback monitoring programs, resulting in millions of dollars in fines for excessive chargebacks, and preventing the defendants from getting access to the credit card and debit card billing systems using their own names, the government said.
Yet, rather than curing their deceptions, defendants have employed a variety of stratagems to continue and expand their scam, the lawsuit said.
Leibowitz explained that to keep the scam going Johnson and his colleagues tricked banks into giving them continued access to these billing systems by creating 51 shell companies with figurehead officers, and providing the banks with phony clean versions of their websites.
Leibowitz said the scam has been in operation since 2006 and has resulted in the swindling of millions of dollars.
The FTC complaint charges that iWorks and its shell companies did not deliver on promises of membership in government programs or the other money-making schemes that were promoted. The companies deceived consumers that their offers are free or risk-free, failed to disclose the numerous fees consumers would be charged and charged them without consumers' consent, the government said.
The FTC complaint names 10 individuals, 10 corporations, and 51 shell companies as defendants. As alleged in the complaint, the lynchpin of the enterprise is Jeremy Johnson, the sole owner and officer of I Works Inc., which has done business under numerous names. The FTC's complaint names Johnson and nine other individual defendants: Duane Fielding; Andy Johnson; Loyd Johnston; Scott Leavitt; Scott Muir; Bryce Payne; Kevin Pilon; Ryan Riddle; and Terrason Spinks. In addition, the 10 corporate defendants are: I Works Inc.; Anthon Holdings Corp.; Cloud Nine Marketing Inc.; CPA Upsell Inc.; Elite Debit Inc.; Employee Plus Inc.; Internet Economy Inc.; Market Funding Solutions Inc.; Network Agenda LLC; and Success Marketing Inc.
The 51 shell companies named in the complaint are Big Bucks Pro Inc., Blue Net Progress Inc., Blue Streak Processing Inc., Bolt Marketing Inc., Bottom Dollar Inc., doing business as BadCustomer.com, Bumble Marketing Inc., Business First Inc., Business Loan Success Inc., Cold Bay Media Inc., Costnet Discounts Inc., CS Processing Inc., Cutting Edge Processing Inc., Diamond J. Media Inc., Ebusiness First Inc., Ebusiness Success Inc., Ecom Success Inc., Excess Net Success Inc., Fiscal Fidelity Inc., Fitness Processing Inc., Funding Search Success Inc., Funding Success Inc., GG Processing Inc., GGL Rewards Inc., Highlight Marketing Inc., Hooper Processing Inc., Internet Business Source Inc., Internet Fitness Inc., Jet Processing Inc., JRB Media Inc., Lifestyles For Fitness Inc., Mist Marketing Inc., Money Harvest Inc., Monroe Processing Inc., Net Business Success Inc., Net Commerce Inc., Net Discounts Inc., Net Fit Trends Inc., Optimum Assistance Inc., Power Processing Inc., Premier Performance Inc., Pro Internet Services Inc., Razor Processing Inc., Rebate Deals Inc., Revive Marketing Inc., Simcor Marketing Inc., Summit Processing Inc., The Net Success Inc., Tranfirst Inc., Tran Voyage Inc., Unlimited Processing Inc., and Xcel Processing Inc.
The FTC is asking the court for an injunction barring future violations of the Federal Trade Commission Act and unspecified redress for consumers harmed by the alleged deception.
The Commission vote to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the District of Nevada.