Feds prosecute work-at-home scams

WASHINGTON — Make big bucks at home stuffing envelopes! Or designing Web sites! Or assembling refrigerator magnets!

That last come-on attracted an estimated 30,000 people, the government said Tuesday, announcing a crackdown on some 200 scam operations that falsely offered lucrative work-at-home and other questionable business opportunities.

Such schemes cheated tens of thousands of people out of more than $100 million, officials said.

Worse news: They said they can’t even estimate how many other such scams are out there.

In a 14-month-long crackdown on promoters of illegal business opportunity and work-at-home schemes, the Federal Trade Commission, Justice Department, U.S. Postal Inspection Service and law enforcement agencies from 14 states took civil and criminal action against more than 200 operations they said engaged in fraud and/or violated consumer protection laws, officials said.

Such offers succeed partly because they “appeal to the optimist in all of us — be your own boss, supplement your income, pay for your child’s education,” said FTC Chairman Deborah Platt Majoras. The reality, she said, is that many are scams promising results that will never happen.

And victims who lose money they invested in some of the businesses are unlikely to ever get it back, said Peter D. Keisler, assistant attorney general in the Justice Department’s civil division.

Some people spent up to $37,500 per machine to invest in a plan to own DVD movie rental vending machines. The company selling them, American Entertainment Distributors of Hollywood, Fla., allegedly said annual earnings from the machines would be $60,000 to $80,000 and that it would help buyers place them in good locations. The FTC alleges the company misrepresented how much help it would give franchisees.