|NEWARK – Acting Attorney General John J. Hoffman and the New Jersey Division of Consumer Affairs today announced a $130,000 settlement with a Mendham-based company the State sued as part of “Operation Empty Promises,” a nationwide crackdown on work-at-home scams.
“This settlement should serve as a clear cautionary note to consumers,” Acting Attorney General Hoffman said. “When an offer seems too good to be true – especially if it’s a work-at-home ad offering thousands of dollars in return for little work -- it may very well be a scam, designed to enrich a con artist while wasting your money and time.”
David Brookman and his company, Capital Enterprises, Inc., lured consumers through ads that promised, “Get Paid From Mailing Our Special Letters From Home! Potential Earnings Of Up To $5,000 Or More Weekly!”
The State’s investigation revealed that Brookman and his company never fulfilled that promise. The State found that, of Brookman’s approximately 13,000 customers, only 45 – less than 1 percent – ever made more than $100 from the envelope stuffing program. Approximately 11,000 made no money at all. The most any consumer ever made from Brookman’s work-from-home scheme was $520 over a 10-month period.
Meanwhile, according to the State’s lawsuit against Brookman, consumers who signed up for the work-at-home program had to pay a registration fee. After paying the fee, they found the terms and conditions substantially changed, often including a requirement to make further payments.
“Schemes like these prey on economically stressed consumers who are lured by the promise that they can make good money by working at home,” said Eric T. Kanefsky, Director of the State Division of Consumer Affairs. “Unfortunately, it is often those who can least afford to get ripped off, that are themselves victimized. We are committed to stopping work-at-home and other scam artists.”
The State’s five-count lawsuit, filed by the Division of Law in State Superior Court in Essex County and transferred to Morris County, alleged that Brookman and his company, Capital Enterprises, Inc., violated the New Jersey Consumer Fraud Act by engaging in unconscionable commercial practices, deception, false promises, and misrepresentations, as well as bait-and-switch tactics, in their advertisement and sale of work-at-home programs. Brookman also conducted business under the names Maxwell Scott Enterprises, Maxwell Scott, David Gates Enterprises, Warner Daniel, and Preston Lord Enterprises.
Under the settlement announced today, Brookman and his company will pay $130,000 which includes $66,712 in civil penalties and $63,288 reimbursement of the State’s attorneys’ fees and investigative costs. Brookman will pay the initial $50,000 within 10 days of the settlement, and the rest in quarterly installments of $10,000.
Also under the terms of the settlement, Brookman is permanently enjoined from advertising or selling work-from-home or direct-mail or similar programs in New Jersey or directed to New Jersey residents. For the next 10 years, Brookman shall not form any business in New Jersey, or advertise the sale of any merchandise, without posting a bond of $250,000, and providing the State with specific information about the business.
Deputy Attorney General Jah-Juin Ho in the Division of Law’s Consumer Fraud Prosecution Section, represented the State in this action. Investigator Kelly Fennell, in the Division of Consumer Affairs’ Office of Consumer Protection, conducted the investigation.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the New Jersey Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.
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