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FTC Actions
FTC Action Summaries
World
Interactive Gaming39. FTC v. World Interactive Gaming Corp., Civil Action No. CV 98 5115 (E.D.N.Y. filed August 11, 1998)
Defendants: World Interactive Gaming Corp., Jeffrey Burton, and Lawrence Blocker, d/b/a James Lawrence and Associates, and Gregory Flemming
Type: Internet Business Scam
Defendants telemarketed shares in an Internet gambling casino, Golden Chips Casino, telling investors profitability would mimic "Microsoft, Netscape and Yahoo." The FTC alleged that they misled consumers by claiming that World Interactive should 'conservatively' earn $100 million in its first year and that investors could expect to make $150,000 or more in one year from their $10,000 investment.
On August 17, 1998, the Court heard the FTC's request for a temporary restraining order. On September 23, 1998 the FTC amended its complaint adding Gregory Flemming as a defendant. Defendants entered into a stipulated preliminary injunction on Sept. 9, 1998. In December 1998, the Commission filed a motion for contempt. After 4 separate hearings, the contempt motion was settled on April 23, 1999.
A proposed proposed settlement will bar deceptive claims in the future, require more than $500,000 to be returned to investor-victims, and require the defendants to post a $2 million bond prior to engaging in, or assisting others engaging in, the promotion, advertising, marketing or sale of an investment in any company that owns or intends to own an online gaming entity.
Bohemia, New York based World Interactive Gaming Corp. and its principals, Jeffrey Burton and Lawrence Blocker, d/b/a/ James Lawrence and Associates, were parties to the settlement.
In addition to the $550,000 consumer redress and $2 million bond requirements, the proposed settlement, which requires the court's approval, would bar Burton and Blocker from misrepresenting the nature and quality, likely return, associated risk or other any other material facts regarding any investment. The settlement bars the use of aliases and bars the defendants from selling, renting or disclosing their customer list. The proposed order imposes a judgment of $1.8 million suspending payment of all but $813,049 frozen by the court in conditional settlement of the judgment, based on financial declarations provided by the defendants. Of the $813,049, $550,000 will be available for consumer redress. Should the court find that the defendants misrepresented their financial situations, the entire $1.8 million becomes due. A separate proposed default judgment against another defendant, Gregory Flemming, similarly enjoins him, imposes a $1.8 million judgment, and requires a $2 million bond before he markets any investment.
The Commission's vote to approve the filing of the proposed consent judgment was 5-0. It and the proposed default judgment were filed by the FTC in the United States District Court for the Eastern District of New York on November 9, 2000, and are awaiting court approval.
http://www.ftc.gov/opa/1998/9808/risky.htm (press release - complaint / TRO)
http://www.ftc.gov/opa/1998/9809/petapp5198.htm (press release - amended complaint)
http://www.ftc.gov/opa/2000/11/wig.htm (press release - settlement)
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