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FTC sue’ing California over tax relief scam

Submitted by on 30 December, 2017 – 4:32 pm

Thousands of consumers drowning in tax debt was the victim of a scam at the national level by a California-based company whose owners enjoyed a luxurious lifestyle in a home of millions of dollars with seven luxury cars in the garage, federal officials Wednesday.

American Tax Relief of Beverly Hills, California, defrauded consumers of more than $ 60 million, according to the Federal Trade Commission, which announced it has filed a lawsuit in an attempt to win consumers money back.

A federal judge in Chicago has ordered the company to stop making misleading claims and appointed a receiver to take over the company. The judge also froze the assets of the business and assets of its owners Alex Hahn, 43, and his wife, Hyun Joo Park, 37, of Beverly Hills.

Hahn was convicted in 2006 of mail fraud in California and sentenced to five years probation and ordered to pay nearly $ 1.3 million restitution, according to a search warrant filed in the current U.S. case Postal Inspection Service. The refund was paid partially from the proceeds of American Tax Relief, said the document.

“The scam is over, closed,” said David Vladeck, director of the Office of the Federal Trade Commission Consumer Protection.

Los Angeles attorney Chuck Kreindler, representing the company, said U.S. tax cuts have helped taxpayers, but a “small percentage of their customers do not seek to solve its fiscal problems, but finding a new way to beat the system “.

Kreindler, said in an e-mail to The Associated Press that the company “vigorously defend” against the FTC action, “which was brought without notice to the ATR, focused on a handful of complainants, and ignored the thousands of consumers who have been helped. ”

The FTC estimated 20,000 consumers paid upfront fees of $ 3,200 to $ 32,000 in value the tax reduction services, according to the lawsuit. The company also handles credit card customers without their approval and gave a few refunds, the lawsuit states.

A new standard FTC telemarketing into effect Oct. 27 will be prohibited from companies that sell services debt relief by phone from charging or collecting fees before solve or reduce the debt of a client .

Warren Mesler, 45, a wooden corridor of Wellsville, New York, said he made two payments to American Tax Relief totaling $ 9,000, but never received help.

“I should have known before I paid them the second time,” Mesler said Wednesday. “When did not return phone calls, I knew I was in trouble.”

bills of victims of high taxes and penalties continued to rise as they waited in vain for help, Vladeck said.

“While pushing people further into debt, the owners of this company were living in a house in Beverly Hills, a $ 3.4 million and maintenance of a garage full of Ferrari, Porsche two, two Mercedes Benz, Bentley and a Rolls Royce, “Vladeck told reporters in Chicago. “I do not even buy American.”

Chicago resident Tim Fullerton, 43, a pharmacy technician telephoned the company for help after hearing the radio ads promising to resolve delinquent taxes for pennies on the dollar, said on Wednesday. Ended up paying thousands of dollars in advance and received no help from the company.

When Fullerton said his wife, Darlene Fullerton, an accountant, about the unfulfilled promises of the company became “very frightened by the whole situation,” he said, and went to work filing complaints with the Better Business Bureau , two state attorneys general and the FTC.

The couple later worked out a payment plan with the Department of Revenue on your own.

The IRS has payment arrangements with people who can not pay all their debt at once. In very limited situations, the IRS allows taxpayers to settle debts for less than it should, but most people do not meet the requirements and needs no help from a third party.

“Consumers do not have to deal with companies like this,” said Darlene Fullerton. “You can not fight.”

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