Friday, Aug. 15, 2014 | 10 p.m.
A federal appeals court has denied the petition of a Las Vegas man, described as the mastermind of a $29 million Internet scam involving thousands of consumers.
The 9th U.S. Circuit Court of Appeals Friday ruled in favor of the Federal Trade Commission to permanently stop Kyle Kimoto from employing marketing tactics and to make restitution to those who lost money.
Kimoto is serving a 29-year prison term for a similar violation. He argued he had no control over the scheme while he was in prison.
But the FTC successfully argued that Kimoto planned the caper and put his then wife, Juliette Kimoto, as the figurehead in charge of the operation.
Juliette Kimoto, who was crowned Mrs. Nevada in 2006, said she never was involved but agreed to return $200,000 in a settlement with federal officials in 2011.
The court found that Kimoto’s wholly controlled company committed multiple violations through misleading advertisements and various marketing schemes.
The companies involved were Vertek’s Line of Credit, Grant Connect and Work From Home. In one part of the operation, Vertek offered a $7,500 unsecured credit line without the usual financial checks.
Hidden in the small fine print was the requirement the consumer could only make purchases from Global Gold’s online store. And the customer would be charged monthly fee of $39.95.
When customers tried to cancel their accounts, Global Gold, operated by Kimoto, made it extremely difficult “needlessly transferring customers to different websites or phone numbers, even though all the calls ended up in the same service center,” said the court.
The Work From Home scheme claimed customers could make $174,150 a year by buying and selling expired Internet domain names.
The court said there was nothing to back up these claims and that false testimonials were issued extolling the system.
Kimoto entered prison in April 2008 and was ordered to make restitution of $106 million on his prior conviction. The court backed the FTC that Kimoto continued to write the texts and false advertisements for new websites.
The court said Kimoto has “consistently engaged in variations on the same marketing scheme, which in its latest iteration alone defrauded consumers out of more than $29 million.”