State Settles 2005 Civil Racketeering Lawsuit Agaist California

Salem-News.com

(SALEM) - Attorney General Hardy Myers Tuesday settled a 2005 civil racketeering lawsuit against two California companies for allegedly tricking 2,776 Oregon businesses, churches and synagogues into endorsing negotiable checks that the companies claimed were actually contracts for Internet `yellow page" listings.

Named in the stipulated general judgment filed today in Polk County Circuit Court are Yellow Pages, Inc. (YPI), doing business as www.YellowPagesInc.com, a Nevada corporation operating out of Anaheim, California; Electronic Directories Company, LLC, an Anaheim, California limited liability company; and their president John M. Wurth of Anaheim. Another business, collection agent Continental Recovery Service of Simi Valley, California was earlier alleged to be part of the racketeering enterprise but was not a named defendant. The defendants admit no law violation.

The judgment was filed as part of a year-long, multi-state investigation and prosecution by Oregon and Attorneys General from 27 other states and the Orange County District Attorney`s Office. The other states on Tuesday filed similar Consent Judgments or Assurances of Voluntary Compliance. Oregon`s was the only civil racketeering lawsuit.

`Unlike legitimate advertisements and solicitations focusing on the benefits of a product or service, these companies used solicitations designed to gain sales through trickery and deceit," Myers said. `The defendants solicited Oregon small business owners, churches and synagogues with misleading checks that appeared to be small refunds from their local yellow pages directory but when endorsed and cashed turned out to be fine print contracts for a new $179 Internet listing."

The Oregon Department of Justice alleged in the 2005 civil racketeering lawsuit that the defendants, from November 2003 through December 2004, mailed thousands of negotiable checks in a misleading solicitation to Oregon.

`Protecting legitimate Oregon businesses and non-profit and religious organizations from fraudulent enterprises is an important part of the Department of Justice legal mandate," Myers said. `In this case, the civil racketeering laws provided us the tools to sue this unscrupulous enterprise resulting in a judgment that permanently stops the unlawful activities and gets restitution for complainants."

Investigators found that the mailing piece was designed to imply a relationship with the recipient`s commonly-used yellow page directory and the checks, ranging from $3.47 to $3.49, appeared to represent a refund of little consequence to resolve a small outstanding debt. The rest of the package allegedly did little to disclose the true nature of the mailing`s purpose. Hence, victims thought they were dealing with their regular yellow pages directory rather than signing up for the new listing.