29 June – LAWFUEL – The Law News Network – R. Alexander Acosta, United States Attorney for the Southern District of Florida, Michael S. Clemens, Special Agent in Charge, Federal Bureau of Investigation, and Deborah Platt Majoras, Chairman, Federal Trade Commission, announced today the unsealing of a thirty-three (33) count Indictment charging defendants, Nathan J. Matalon, George F. Kunkel, Jr., Clark B. Sampson, Donald P Manfredonia, and Cesar Menendez with conspiracy, mail and wire fraud, in violation of Title 18, United States Code, Sections 1349, 1341, 1343 and 2, in connection with their sale of business opportunities to own and operate payphones. Four of the five defendants were arrested this morning and appeared before U.S. Magistrate Theodore Klein. Bond was set for each of the defendants. If convicted of all charges in the Indictment the defendants face a statutory maximum penalty of twenty (20) years’ imprisonment.
As alleged in the Indictment, the defendants worked for Public Telephone Corporation (“PTC”). Matalon directed the business activities of PTC, including those of its telemarketers, while defendants Sampson, Manfredonia and Menendez worked as telemarketers for the company. Defendant Kunkel assisted Matalon in the supervision of telemarketers.
According to the Indictment, the defendants solicited businesses and individuals throughout the United States to purchase business opportunities regarding payphones, customarily offering a package of seven (7) payphones for $15,000. Specifically, the Indictment charges that the defendants conspired and schemed to unjustly enrich themselves by misappropriating approximately $2 million from purchasers by making material false statements and omissions concerning, among other things, the expected profits of PTC’s payphone business opportunity. Among the misrepresentations alleged in the Indictment are that PTC was in partnership with American Telephone & Telegraph and that a report by a well-known Wall Street investment firm supported PTC’s claims of profitability.
The Indictment announced today is a continuation of Project Biz Opp Flop, a multi-agency effort to crack down on business opportunity fraud. As part of this Operation, twelve (12) criminal prosecutions of six different business opportunity schemes were announced in February 2005, and three other cases were charged by Information in May 2005. Eleven defendants have already pled guilty and are awaiting sentencing.
Mr. Acosta commended the investigative efforts of the Federal Bureau of Investigation and the Federal Trade Commission. This case is being prosecuted by Special Assistant United States Attorney Chris Couillou and Assistant United States Attorney Wilfredo Fernandez.