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SALT LAKE CITY (AP) -- More than 100,000 people nationwide lost more than $106 million in a telemarketing scam that originated in southern Utah, the Federal Trade Commission said.
The FTC named Kyle Kimoto of St. George, president of Assail Inc., as "chief architect" of the operation.
Assail and Infinium of Cedar City were shut down and liquidated by the FTC in January.
Victims lost money from around 1999 to 2000, said James Kohm, assistant director of the FTC's Bureau of Consumer Protection.
The FTC this week permanently banned Kimoto, former Infinium President Brian Schofield and other associates from engaging in any future telemarketing, and it prohibited them from selling their customer lists.
The agency said Kimoto and his associates orchestrated an international network that marketed "guaranteed" credit cards to people with poor credit.
The victims paid about $175 in advance for cards, which sometimes never arrived, the FTC said.
Many victims also bought other bogus financial services products costing an additional $50 to $100 each, Kohm said.
In some cases, Assail and its affiliates marketed cards that not only required an advance fee but could only be used to buy merchandise from a catalog, said Francine Giani, director of the Utah Division of Consumer Protection.
Ayman Soliman of New York City paid $200 for a card that he hoped would enable him to develop his credit history after moving to the United States from Egypt.
The card and catalog came three months later.
"Once I opened it, I realized it was pretty much a scam," he said. "The merchandise was overpriced and they added on another 30 percent in costs on top of that for shipping and handling."
He rejected the card and demanded his money back but the request was denied.
He later called the Better Business Bureau and the Utah Division of Consumer Protection.
Giani said she was able to help about a dozen victims get some or all of their money back.
However, as complaints poured in from across the country, her agency, because of its limited resources, began forwarding them to the FTC, which took over investigation.
Giani did not know of any Utah victims.
She said it is not unusual for scam artists to not target residents of the state in which they operateto avoid being detected by state and municipal authorities.
Kohm said Kimoto and his associates either operated or contracted with call centers in the United States, Canada, India and the Caribbean to peddle the fake cards and other financial services products. Another company, Specialty Outsourcing Solutions Ltd., which contracted with Kimoto and his associates, was not shut down but was ordered to pay $512,000.
Kimoto, who has admitted no wrongdoing, has been ordered to sell virtually all of his assets, including his home, his vehicles and nearly all his personal property, the FTC said.
Kohm estimates the proceeds will top $5 million and will be set aside for victim compensation.
Kimoto's phone number is unlisted and he could not be reached for comment Thursday.
Schofield, who like Kimoto has admitted no wrongdoing, has been ordered to pay $200,000, declined comment, but his attorney, Rob Swanton, said, "Brian was fully cooperative with the FTC and the government and he was happy to help resolve any issues or questions that they had about this matter."
(Copyright 2003 by The Associated Press. All Rights Reserved.)
