Federal, state officials to crack down on Web, cable scams

Summary:The Federal Trade Commission and the New York Attorney General's office on Tuesday said they plan to crack down on allegedly fraudulent Web and cable television companies, including an online gambling concern that investigators claim bilked investors out of more than $2 million.Both the FTC and New York law enforcement officials are targeting a Suffolk County, N.

The Federal Trade Commission and the New York Attorney General's office on Tuesday said they plan to crack down on allegedly fraudulent Web and cable television companies, including an online gambling concern that investigators claim bilked investors out of more than $2 million.

Both the FTC and New York law enforcement officials are targeting a Suffolk County, N.Y. company called World Interactive Gaming Corp., with the FTC having already filed suit against it in federal court, and Attorney General Dennis Vacco's office saying a state lawsuit against the company is imminent.

Make money on the Web
World Interactive Gaming Corp. told investors in its illegal Web casino that they could turn a $10,000 investment into a $157,000 profit in one year, and collected $2 million in investments from between 150 and 200 consumers, said Jodie Bernstein, director of the FTC's Bureau of Consumer Protection. Company officials marketed the scam by telling investors their profits "would mimic Microsoft (Corp.), Netscape (Communications Corp.) and Yahoo! (Inc.)," Bernstein said.

A hearing in the FTC's case against the company is scheduled for Aug. 17 in U.S. District Court for the Eastern District of New York, Bernstein said. Meanwhile, Vacco's office said Tuesday it has sent a letter to World Interactive Gaming Corp. officials to inform them that they are "potential targets of a lawsuit based on their involvement in this illegal enterprise," according to a statement.

The lawsuit would seek to bar the company from doing business in New York State and to prosecute its executives under a New York law banning the promotion of gambling, officials from Vacco's office said.

Fake Elvis
The attorney general's office has already frozen the company's assets and banned it from conducting business while the investigation continues, officials from Vacco's office said. The assets were frozen last month after a company official tried to transfer $500,000 in investor funds from a New York bank account to a bank in Antigua, they said.

The FTC also announced actions against two allegedly fraudulent cable TV marketers, including one company that agency officials said hawked fake Elvis Presley CDs, and another that solicited investments for two cable channels, "Children's Cable Network" and "My Pet TV," which did not exist.

Topics: Banking, Legal, Microsoft

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