Husband and Wife Charged Over Million Dollar ‘Work at Home’ Scam – US Legal News

LawFuel.com – Legal Newswire
PREET BHARARA, the United States Attorney for the
Southern District of New York, and RONALD J. VERROCHIO, the
Inspector-in-Charge of the New York Office of the United States
Postal Inspection Service (“USPIS”), announced that PHILIP
PESTRICHELLO and ROSALIE FLORIE, husband and wife, were arrested
today on charges of running a “work-at-home” scheme that
defrauded consumers nationwide and netted them more than a
million dollars.
According to the Complaint unsealed in Manhattan
federal court today:
The PPSN Scam
Since June 2007, PESTRICHELLO and FLORIE have run a socalled
“work-at-home” business that defrauded consumers by
tricking them into sending money under the pretense that the
consumers were enrolling in a program that would allow them to
earn income at home. In fact, the consumers typically got
nothing in return for their payment. PESTRICHELLO and FLORIE
operated their work-at-home scam under the names of various
business entities including “Preferred Platinum Services Network,
LLC;” “PPSN, LLC;” “the Home Based Associate Program;” and “the
Postcard Processing Program” (hereafter, referred to collectively
as “PPSN”).
Using the U.S. mail, the Internet, and classified print
advertisements, PPSN promised consumers the opportunity to earn a
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“weekly paycheck” by labeling postcards that advertised a product
called the “Mortgage Accelerator Program.” Consumers were told
they could earn $1.00 for each postcard they labeled.
Statements in PPSN’s advertising and mailings to
consumers included, for example:
“Would you like an opportunity to earn a $475 check
from home processing Mortgage Products Postcards for
our company?”
“EARN $1.00 PER POSTCARD”
“Rest assured, this is NOT a gimmick or some shady ‘get
rich quick scheme.’ Our company has a rock-solid
reputation. . . . As one of our Home Based Associates
you could earn $1.00 (one-dollar) for each Postcard you
process and we conveniently offer you weekly
compensation directly by Company Check each Friday.”
To participate in the program, consumers were required
to pay an up-front enrollment fee of $80 to $90. The enrollment
forms also invited consumers to request rush shipping of
materials for an additional fee, typically of $10 to $15.
The vast majority of consumers ultimately received no
money at all, after paying the up-front fee and labeling and
returning the postcards as instructed. Even those few
individuals who were paid did not receive anything near the
promised payments of $1.00 per postcard.
Consumers were also led to believe by PPSN’s marketing
materials that they would have to pay a “one-time” enrollment fee
and nothing more. However, after consumers paid their enrollment
fee, they were asked for more money to remain in the program.
Typically, consumers learned for the first time after paying the
enrollment fee that they had to pay an additional fee, usually
$40, for a new batch of 100 postcards for processing.
Consumers were also pressured to return their first set
of labeled postcards “within 5 days” or risk delays with their
paychecks. This caused many consumers to send in money for
second and third batches of postcards before they received
payment for the first batch. By the time they realized they were
not receiving any paychecks at all from PPSN, many consumers had
already sent PPSN between $150 and $350.
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After consumers complained to PPSN that they did not
receive the weekly paycheck, they either received no response
from the company or were then told, contrary to PPSN’s earlier
representations regarding the operation of the program, that the
program was a “commission” program, and that they would receive a
commission only if and when the postcards they sent out generated
a sale on the “Mortgage Accelerator” product advertised in the
postcards. In fact, the Mortgage Accelerator Program itself
appears to have been a sham, non-existent product.
Although the work-at-home program was marketed as
offering a “100% Satisfaction Policy” guaranteeing consumers a
refund in the event they are not fully satisfied with the
program, refunds were rarely, if ever given. If a refund was in
fact given, it was typically only after a consumer had complained
to law enforcement authorities.
According to the Complaint, bank records for PPSN show
that the company took in more than a million dollars from
consumers since it began operating in June 2007. Numerous
consumers around the country have complained to federal and state
authorities, and to the Better Business Bureau, about being
defrauded by PPSN.
Pestrichello’s Past History of Operating Similar Scams
As set forth in the Complaint, PESTRICHELLO has a
history of operating deceptive work-at-home schemes and other
consumer frauds going back to the early 1990s.
Between 1992 and 2002, PESTRICHELLO was the subject of
numerous enforcement actions by the New Jersey Division of
Consumer Affairs, the Office of the Attorney General in the State
of Florida, and the FTC, in connection with his operation of
other consumer fraud schemes. Those actions resulted in
permanent injunctions barring PESTRICHELLO from engaging in the
type of conduct and business alleged in the Complaint.
In 2003, PESTRICHELLO was convicted of mail fraud, in
the United States District Court for the Southern District of New
York, in United States v. Pestrichello, 03 Cr. 667 (GEL), in
connection with the marketing and sale of a work-at-home scheme
under the business name “IMXT & Co.” He was sentenced to 36
months’ incarceration in that case. PESTRICHELLO operated PPSN,
while on supervised release after his release from prison.
* * *
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PESTRICHELLO and FLORIE are each charged with one count
of mail fraud. If convicted on these charges, they face a
maximum sentence of 20 years in prison. PESTRICHELLO and FLORIE
are both 38 years old. They reside in Bayville, New Jersey.
PESTRICHELLO and FLORIE will be presented today before
U.S. Magistrate Judge Michael Dolinger.
Mr. BHARARA praised the efforts of the United States
FTC and the USPIS and thanked them for their assistance in this
case. He added that the investigation is continuing.
“Work-at-home scams prey on some of the most vulnerable
in our society — the economically disadvantaged, the unemployed,
the disabled, and the elderly — who are trying to supplement
their income by working from home. Philip Pestrichello and
Rosalie Florie allegedly did exactly that, preying on the
vulnerable and lining their pockets with more than $1 million of
their victims’ hard-earned money. Together with our law
enforcement partners at the FTC and the U.S. Postal Inspection
Service, this Office is committed to ensuring that those who
target consumers though fraudulent marketing campaigns are
apprehended and prosecuted before they can cause more harm,” said
U.S. Attorney PREET BHARARA.
This case is being prosecuted by the Office’s Complex
Frauds Unit. Assistant United States Attorney LISA ZORNBERG is
in charge of this prosecution.
10-040 ###

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