FTC closes government grant scam websites...

(Media-Newswire.com) - A U.S. district court has shut down several Web sites that scammers have been using to falsely claim that they can help consumers get free government grant money, the Federal Trade Commission announced today.

At the request of the FTC, the court issued an order closing the Web sites of several related companies that falsely promised consumers that their “Easy to Use Program,” Grant Connect, could help people “instantly find the grant that’s right for [them],” while using pictures of President Obama, Vice President Biden, and the American flag to give the false impression that they were connected to the government. The FTC also charged the companies with using bogus testimonials, failing to disclose the actual cost of their product, bundling multiple other products together for sale without adequate disclosures, and debiting consumers’ bank accounts on a recurring basis without permission.

On July 28, 2009, the court entered an order that temporarily halts these companies’ illegal activities. Subsequently, five of the 12 defendants in the case agreed to a preliminary injunction halting these practices until the matter is decided at trial. The court has set a preliminary injunction hearing for the remaining defendants for September 11, 2009. The FTC is seeking to permanently stop these practices and force the companies to return their ill-gotten gains so the funds can be used to reimburse consumers who were defrauded.

According to the FTC, the operators sell many products online, including Grant Connect, which they describe as “a unique, consumer-friendly US government grant program that delivers all of the tools for the consumer to search multiple databases, write grant proposals, and deliver polished plans...” While the companies claim that consumers will be charged only a few dollars at most, they instead bundle other products and services, such as identity theft protection services, credit offers, and purported health benefits plans with their offer, ultimately charging consumers as much as $70 per month.

Using an affiliated network of Web sites, including www.grantconnectoffer.com and others, they make claims such as: “Grant Connect - $15 Billion of Free Money Available;” “Over $10 Billion Issued in 2009 Already;” and “EASY TO USE PROGRAM: Instantly find the Grant that’s right for you!” They also claim that Grant Connect “makes the process FAST and EASY, so all you have to worry about is where to spend your money!” In addition, the Grant Connect site features “testimonials,” including photos of people who supposedly got grants from the company, including one that states, “It’s so easy! I got my first grant for $300,000. All I have to do is search and click.”

To further persuade consumers into purchasing their product, the Grant Connect site has used images of the President and Vice President in an effort to suggest an affiliation with the U.S. government. For a time, the site featured a photo of President Obama and Vice President Biden standing in front of an American flag, next to the Grant Connect logo and a caption that read, “CHANGE Is Here! $15 BILLION in FREE Government MONEY for you!”

Unfortunately for consumers, according to the FTC, Grant Connect provides little more than outdated, useless information and worthless grant writing “tools.” Few, if any, grants are available to consumers who sign up for the program, and those that are require applicants to meet strict eligibility requirements before they are even considered for the grant.

In addition, while the Web sites tell consumers they can get the Grant Connect service for a one-time fee of as little as 99 cents to $2.78, they do not adequately disclose that buyers will be automatically signed up for other products and services costing up to $70 a month. While the Web site contains some disclosure language in small, densely packed type, few consumers realize they will be charged monthly for services such as “SmartHealth Gold medical and lifestyle benefits” and “VComm International and Long Distance Calling Service” unless they cancel these memberships.

The FTC charged the Grant Connect defendants with violating federal law by: 1 ) making deceptive representations regarding Grant Connect, 2 ) failing to adequately disclose the material terms and conditions of their offers, and 3 ) violating the Electronic Funds Transfer Act by debiting consumers’ bank accounts on a recurring basis without their authorization.

The Commission vote authorizing the complaint was 4-0. It was filed in the U.S. District Court for the District of Nevada on July 27, 2009. The complaint names Grant Connect, LLC; Global Gold, Inc.; Horizon Holdings, LLC; O’Connell Gray, LLC; Pink LP, Vantex Group, LLC; Vertek Group, LLC; Rachel A. Cook, manager of Vantex, and Vertek; James J. Gray, managing member of Grant Connect, Horizon Holdings, and O’Connell Gray; Steven R. Henriksen, president and owner of Global Gold; Juliette M. Kimoto, owner of Vertek and General Partner of Pink; and Randy D. O’Connell, managing member of Horizon Holdings and O’Connell Gray.

The five defendants who agreed to the preliminary injunction entered by the court on August 18, 2009, are: Grant Connect, LLC; Horizon Holdings, LLC; O’Connell Gray, LLC; James J. Gray; and Randy D. O’Connell.

The FTC appreciates the assistance of United States Attorney’s Office for the District of Nevada, the Better Business Bureau of Northern Nevada, the Better Business Bureau of Southern Nevada, the Las Vegas Metropolitan Police Department, and Reno Police Department ( Financial Crimes/Computer Crimes Department ) in this matter.

The FTC has announced several other grant fraud cases as part of the “Operation Short Change” law enforcement sweep targeting economic stimulus frauds, as well as a complaint
against a company that promised consumers “guaranteed” $25,000 government grants. Information about these cases can be found on the Commission’s Web site at: http://www.ftc.gov/opa/2009/07/shortchange.shtm and http://www.ftc.gov/opa/2009/07/gwi.shtm.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.


Copies of the Commission’s complaint can be found on the FTC’s Web site and as a link to this press release. The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP ( 1-877-382-4357 ). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

MEDIA CONTACT:
Mitchell J. Katz,
Office of Public Affairs
202-326-2161
STAFF CONTACT:
Roberto Anguizola
Bureau of Consumer Protection
202-326-3284

Tracey Thomas
Bureau of Consumer Protection
202-326-2704

( FTC File No. 092-3126; Civ. No. 2:09-CV-01349 )
( Grant Connect.final )

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Below are the Catalog of Federal Domestic Assistance titles with numbers. To research them go to cfda.gov

Women's Business Ownership Assistance
10.442
USDA
Housing Application Packaging Grants
10.410
USDA
Very Low to Moderate Income Housing Loans
14.313
HUD
Dollar Home Sales
10.417
USDA
Very Low-Income Housing Repair Loans and Grants
10.212
USDA
Small Business Innovation Research
14.247
HUD
Self-Help Homeownership Opportunity Program
10.773
USDA
Rural Business Opportunity Grants
11.800
DOC
Minority Business Enterprise Centers
59.012
SBA
Small Business Loans
59.037
SBA
Small Business Development Center
10.769
USDA
Rural Business Enterprise Grants
10.768
USDA
Business and Industry Loans
91.001
USIP
Unsolicited Grant Program
11.803
DOC
Minority Business Opportunity Center (MBOC)
97.048
DHS
Disaster Housing Assistance to Individuals and Households in Presidential Declared Disaster Areas
59.006
SBA
8(a) Business Development Program
10.404
USDA
Emergency Loans
14.235
HUD
Supportive Housing Program
10.217
USDA
Higher Education Challenge Grants
59.011
SBA
Small Business Investment Companies
84.063
ED
Federal Pell Grant Program
59.046
SBA
Microloan Program
59.005
SBA
Internet-Based Technical Assistance
17.700
DOL
Women's Bureau
14.239
HUD
HOME Investment Partnerships Program
14.311
HUD
Single Family Property Disposition
14.149
HUD
Rent Supplements_Rental Housing for Lower Income Families
10.766
USDA
Community Facilities Loans and Grants
14.218
HUD
Community Development Block Grants/Entitlement Grants
10.433
USDA
Rural Housing Preservation Grants
59.051
SBA
New Markets Venture Capital Program, Operational Assistance (OA) Grants
96.006
SSA
Supplemental Security Income
84.002
ED
Adult Education_State Grant Program
10.451
USDA
Noninsured Assistance
17.266
DOL
Work Incentive Grants
11.300
DOC
Investments for Public Works and Economic Development Facilities
10.051
USDA
Commodity Loans and Loan Deficiency Payments
59.050
SBA
Microenterprise Development Grants
97.036
DHS
Disaster Grants - Public Assistance (Presidentially Declared Disasters)
97.031
DHS
Cora Brown Fund
14.195
HUD
Section 8 Housing Assistance Payments Program_Special Allocations
15.226
DOI
Payments in Lieu of Taxes
15.633
DOI
Landowner Incentive
11.307
DOC
Economic Adjustment Assistance
14.901
HUD
Healthy Homes Demonstration Grants
84.007
ED
Federal Supplemental Educational Opportunity Grants
14.401
HUD
Fair Housing Assistance Program_State and Local
93.558
HHS
Temporary Assistance for Needy Families
10.551
USDA
Food Stamps
97.050
DHS
Presidential Declared Disaster Assistance to Individuals and Households - Other Needs
10.415
USDA
Rural Rental Housing Loans
14.871
HUD
Section 8 Housing Choice Vouchers
17.225
DOL
Unemployment Insurance
10.079
USDA
Bill Emerson Humanitarian Trust
45.024
NEA
Promotion of the Arts_Grants to Organizations and Individuals
10.427
USDA
Rural Rental Assistance Payments
84.037
ED
Perkins Loan Cancellations
14.412
HUD
Employment Opportunities for Lower Income Persons and Businesses
59.009
SBA
Procurement Assistance to Small Businesses
14.181
HUD
Supportive Housing for Persons with Disabilities
14.103
HUD
Interest Reduction Payments_Rental and Cooperative Housing for Lower Income Families
14.219
HUD
Community Development Block Grants/Small Cities Program
10.437
USDA
Interest Assistance Program
14.169
HUD
Housing Counseling Assistance Program
10.854
USDA
Rural Economic Development Loans and Grants
85.001
HST
Harry S Truman Scholarship Program
45.168
NEH
Promotion of the Humanities_We the People
10.856
USDA
1890 Land Grant Institutions Rural Entrepreneurial Outreach Program
96.001
SSA
Social Security_Disability Insurance
14.117
HUD
Mortgage Insurance_Homes
14.856
HUD
Lower Income Housing Assistance Program_Section 8 Moderate Rehabilitation
10.411
USDA
Rural Housing Site Loans and Self_Help Housing Land Development Loans
17.258
DOL
WIA Adult Program
47.076
NSF
Education and Human Resources
10.446
USDA
Rural Community Development Initiative
59.007
SBA
7(j) Technical Assistance
59.049
SBA
Office of Small Disadvantaged Business Certification and Eligibility
10.082
USDA
Tree Assistance Program
84.083
ED
Women's Educational Equity Act Program
14.157
HUD
Supportive Housing for the Elderly
14.250
HUD
Rural Housing and Economic Development
17.207
DOL
Employment Service/Wagner-Peyser Funded Activities
93.569
HHS
Community Services Block Grant
10.420
USDA
Rural Self-Help Housing Technical Assistance
10.405
USDA
Farm Labor Housing Loans and Grants
14.511
HUD
Community Outreach Partnership Center Program
97.001
DHS
Pilot Demonstration or Earmarked Projects
14.225
HUD
Community Development Block Grants/Special Purpose Grants/Insular Areas
84.032
ED
Federal Family Education Loans
20.905
DOT
Disadvantaged Business Enterprises_Short Term Lending Program
10.220
USDA
Higher Education Multicultural Scholars Program
84.268
ED
Federal Direct Student Loans
81.036
DOE
Inventions and Innovations
10.761
USDA
Technical Assistance and Training Grants
19.409
STATE
Arts Exchanges on International Issues
14.243
HUD
Opportunities for Youth_Youthbuild Program
81.042
DOE
Weatherization Assistance for Low-Income Persons
85.100
(null)
Christopher Columbus Fellowship Program
17.720
DOL
Disability Employment Policy Development

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