Preston Lord Industries Scam Basking Ridge, New Jersey

Gov. Action Date of Action: 7/25/2011 March 2, 2011 NEWARK - The Office of the Attorney General and the Division of Consumer Affairs have filed suit against a Mendham-based work-at-home company and its principal, alleging that they defrauded consumers through offers to earn income by stuffing envelopes or assembling booklets. The state's lawsuit is part of "Operation Empty Promises," a nationwide crackdown against work-at-home scams announced today. Operation Empty Promises is a multi-agency law enforcement initiative which includes ten FTC actions, forty-eight criminal actions by the Department of Justice (many of which involved the assistance of the U.S. Postal Inspection Service), seven additional civil actions by the Postal Inspection Service, and twenty-six actions by state law enforcement agencies. The state's five-count Complaint, filed in State Superior Court in Essex County, alleges that David S. Brookman, 40, and his company, Capital Enterprises, Inc., violated the state Consumer Fraud Act and Advertising Regulations through bait-and-switch tactics in advertisements that stated consumers could earn "up to $5,000 or more weekly" by stuffing envelopes and mailing letters, and "$2,500 or more weekly" by assembling booklets.

The state alleges that after consumers paid registration fees to Brookman and Capital Enterprises, defendants then changed the terms and conditions of their work-at-home programs to require additional undisclosed payments and fees. Capital Enterprises does business as Maxwell Scott Enterprises, Maxwell Scott, David Gates Enterprises, and Warner Daniel. The state's Complaint alleges that David Gates is an alias used by Brookman. The state is seeking restitution for consumers, along with imposition of civil penalties and reimbursement of attorneys' fees and costs and defendants' compliance with the state's consumer protection laws and regulations. The lawsuit, which is being transferred to State Superior Court in Morris County, alleges that the defendants engaged in unconscionable commercial practices and used deception, false pretenses, false promises and misrepresentations to defraud consumers. The defendants allegedly also knowingly omitted material facts when soliciting consumers and engaged in bait-and-switch tactics.

For example, the defendants allegedly failed to disclose to consumers prior to their payment of the registration fee for the booklet assembly work-at-home program that the stated income potential for assembling booklets only applied if the consumer, at his or her own expense, advertised and marketed the very booklets they were to assemble. Consumers can file complaints with the Division of Consumer Affairs by using the forms available at www.njconsumeraffairs.gov or by calling 1-800-242-5846 (toll-free within N.J.) or 973-504-6200.