Markets Wired

At the request of the Federal Trade Commission, the operator of a business opportunity scam has been held in contempt for the second time by a federal court and ordered to take steps to turn over the title of his Las Vegas, Nevada home or face jail time.

The court found that the operator of the scam, Richard C. Neiswonger, failed to deliver marketable title to his home, in violation of a previous court order entering a $3.2 million judgment against him. The FTC charged that the defendant deceived consumers with false promises that they could make a six-figure income by selling his “asset protection services” to those seeking to hide their assets from potential lawsuits or creditors.

The current contempt order, filed in U.S. district court last week, requires Neiswonger to take specific steps to effectuate the transfer of his home to a court-appointed receiver by September 22, 2009, or face imprisonment.

In April 2007, the same court held Neiswonger, his business partner William S. Reed, and their firm, Asset Protection Group, Inc., in civil contempt for violating the terms of a 1997 court order prohibiting them from deceptively promoting any “program,” as that term is defined in the order, and from failing to disclose material facts to consumers. The court’s 2007 order banned Neiswonger from telemarketing and from selling any business opportunity program to consumers. The court subsequently entered $3.2 million judgment against Neiswonger – the amount of his ill-gotten gains – and required him to transfer the title of his Las Vegas home to a court-appointed receiver within 20 days if he failed to pay the judgment in full.

Despite Neiswonger’s arguments that he had done everything he could to transfer the title, the court disagreed, leading to the contempt order announced today. If Neiswonger fails to comply with the current contempt order, he could be imprisoned until he complies fully.

The current memorandum and order for civil contempt was issued by the U.S. District Court for the Eastern District of Missouri and filed on September 15, 2009.

Copies of the court’s memorandum and order are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. 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 1,700 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.

(Civ. No. 4:96CV2225SNLJ)
(Neiswonger.final)