DES MOINES, IOWA (February 29, 2019) — The Iowa Attorney General’s Office is asking a judge to shut down several Quad Cities-based advertising companies that are accused of continuing to defraud small businesses across the nation.
In December, Attorney General Tom Miller filed a lawsuit against Alphonso Barnum of Davenport, his wife and mother, and several limited-liability corporations, including City Wide Promotions, Top Faith Solutions, and New Start Media. The lawsuit alleges the defendants violated the Iowa Consumer Fraud Act.
Barnum’s businesses use deception, confusion and high-pressure tactics purportedly to sell advertisements for direct-mail pieces and promotional items such as high school sports posters and city information guides — and in many cases, delivered no products, the lawsuit alleges.
In an amended lawsuit filed this week, the state alleges that Barnum’s business continues to operate under the names Greater Solutions LLC and Xpreshion Multimedia LLC, based in Moline, Illinois. The lawsuit also names Kelsey J Patterson (a/k/a Kelsey J Sagers), manager of Greater Solutions, and Henry Alexander Clark, who created Xpreshion Multimedia LLC. The state also filed a petition asking for a temporary and permanent injunction to stop the defendants from conducting business.
“The Defendants have again changed their name to avoid detection,” states the petition for injunction. “Despite a lawsuit filed against them alleging fraudulent practices, Defendants have continued, if not increased, their unlawful practices in this nationwide scam.”
Here’s one example of how the scam works, according to court documents filed by the Attorney General:
An owner of a restaurant near St Louis said a caller from Top Faith Solutions contacted him in summer 2018 saying he owed money for advertising. The owner said he had no recollection of dealing with the business. Over the next several months, he continued to receive calls from Top Faith and Greater Solutions.
“They usually told me my invoice/bill was in arrears by several months, the ‘product’ was ready to go, and that if I agreed to pay on that day that they were calling, they would reduce what they claimed I owed,” he said.
In August 2018, the owner said Top Faith pressured him to pay what he was told was a past-due account and threatened to send him to collections. He gave Top Faith his bank account information, including account and routing numbers. He never received the mailer or any product the company claimed he ordered.
From Aug. 28 to Jan. 4, Top Faith and Greater Solutions ran 13 checks totaling $50,000 through the owner’s business checking-account, records show. He was able to stop payment on a final check for $6,800 on January 15.
In February, the owner received calls from the same phone number as he had previously, but this time the callers said they were calling for Xpreshion Multimedia. In one call, Xpreshion said that he owed $20,000 and threatened to report him to an outside collection agency, but they would accept $3,000 if he paid immediately. The company asked him to send the check to an address in Davenport.
The Attorney General’s Office has sworn affidavits from small business owners in Iowa, Wisconsin, Texas, Idaho, and Michigan who report that defendants also used similar deceptive practices on them.
“The defendants in this case seek to confuse and deceive small business owners, who in general receive many calls soliciting advertising and other services,” Miller said. “The defendants take advantage of that by changing business names, lying, and threatening them.”
Miller also reminded consumers to never give bank-account information or credit-card numbers to telemarketers or others over the phone. And consumers should homework: A Google search shows that consumers around the country have complained about some of the entities owned by Barnum, and New Start Media has an “F” rating from the Better Business Bureau.
The state seeks penalties against the defendants for up to $40,000 for each violation, in addition to reimbursing victims for all money wrongfully obtained. The Attorney General’s Office also asks a judge to permanently dissolve each of Barnum’s companies and prohibit the Barnums and other defendants from operating any business involving advertising or the selling of promotional items.