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IMG suit peels back layers
Jul 16, 2004 12:00 am
Recently unsealed court documents peel back the layers on a seven corporation outfit with its home base in Lebanon that government attorneys say sought to bilk investors across the country.
And would-be investors in the franchise-style business ventures of Internet Marketing Group, Inc. say the company's adopted hometown – Lebanon – was "continuously" mentioned in their marketing pitch as far away as Los Angeles and Michigan.
The Federal Trade Commission in a June 28 complaint filed in U.S. District Court in Nashville alleges IMG of Lebanon and six other businesses in four states acted as a "common enterprise" to operate an illegal business opportunity scheme.
The FTC lawsuit details how IMG of Lebanon acting together with the other companies marketed public access Internet terminals and calling card programs to investors across the country since 2001.
The government maintains IMG and its related companies repeatedly violated state Do Not Call laws, a similar federal law as well as misrepresenting their cancellation and refunds polices along with making unsubstantiated earnings claims.
The complaint along with a written statement released Monday by the FTC details how IMG and its affiliates would use automated telemarketing to generate interest in their business ventures.
Interested people would then attend seminars where IMG employees would sell them on buying either the calling card program or the public access Internet terminals. The terminals were to make money for the investors through usage fees as well as by selling advertising at the terminals themselves.
The FTC alleges refund polices were not followed as well as earnings statements being made that the company could not substantiate.
It is unclear how the company or its president, Cindy Austen-Gannon, made their way to Wilson County and Lebanon.
The court documents state IMG and its officers made the move to Tennessee after failing to comply with a settlement with the Florida Attorney General's office.
Government-filed documents in the case give addresses of 300 N. Maple St. in Lebanon and 111 Opossum Hollow Rd. in Watertown as addresses for the business. A telephone call to a listed number for Gannon at 115 Opossum Hollow Rd. was not returned at press time.
Lebanon/Wilson County Chamber of Commerce President Sue Vanatta said that though Gannon would not join the Chamber when approached, there have been a number of out-of-town inquiries about IMG at the Chamber office by angry and concerned consumers outside Tennessee.
Consumers out of state that contacted The Lebanon Democrat described the same pattern as in the FTC complaint.
Charles Himeles, a retired real estate investor from Los Angeles, said he paid IMG $8,000 on June 20 as a down payment on four Internet access terminals. He said the process began with a telemarketing call.
"It sounded exciting," Himeles, 58, said. "I figured I didn't have anything to lose."
He added several things happened to make him "suspicious" since making the payment and he declined to pay the rest of the $32,000 his contract said he owed for the four terminals.
Kim McQueen, a 37-year-old trucking company president in Lavonia, Mich., gave a nearly identical story.
McQueen said she paid $15,000 for one terminal after attending a seminar in April. She has yet to get either the machine or her money back.
McQueen said she holds out hope the company will make good on their promise, commenting that she received a financial statement from them at the seminar showing some $5 million in assets, a similar figure to the one given to Himeles at the Los Angeles seminar.
"I think they tried to grow too fast and could not service the people they had," McQueen said. "I had hoped it would turn around. I thought I could make money with it."
Both Himeles and McQueen said the IMG staff mentioned Lebanon "continuously" in their sales pitch.
"They kept talking about Lebanon, but most of them were from Florida," McQueen said. "We kept trying to figure out the connection."
IMG and its affiliates will be in federal court Monday in Nashville for the FTC to argue that a temporary restraining order and a freeze of IMG assets should stay in place.
Managing Editor Clint Brewer can be reached at 444-3952 ext. 13 or by e-mail at firstname.lastname@example.org.