My FTC moment came not long after we settled the agency’s litigation over a massive consumer fraud scam in the Fall of 2001. I sat I my desk in the Division of Marketing Practices in the FTC’s Bureau of Consumer Protection sorting through my mail, when I spotted an odd looking package. The package was hand-addressed to me and bore the return address of a named defendant. Given that he was represented by counsel in our case, I never expected to receive a communication directly from him. It should also be noted that this took place shortly after the anthrax packages were mailed to federal office buildings after 9/11.
I started the case that became FTC v. Crescent Publishing when I was an Assistant Attorney General in New York because we had a lot of complaints about a particularly fraudulent website. The site offered free trial access to pornography, but only to adults who were able to verify their age using a credit card. They took the credit cards alright. But then they just started billing them incessantly. In part, the scam was so successful because victims were too embarrassed to complain. After I moved from the state government to the FTC, I joined up with Doug Wolfe, who was already then a seasoned litigator to work the case.
Over many months, we pieced together a trail of victims, money, and a shadowy network of shell companies. Predictably, all the money was funneled to off-shore havens. Through our litigation efforts, we were able to get approximately $30 million of the fraudulently obtained funds brought back into the country to compensate those victims willing to step forward. Then we referred the evidence we assembled to criminal prosecutors, who connected the scheme up to elements of the Gambino crime family. All told, criminal authorities attributed more than $500 million in fraud to the group we had been tracking.
So, it was with great surprise that I examined a package addressed to me shortly after we settled the FTC’s litigation in the case. A cursory examination of the outside of the package led me to believe that it had all the hallmarks of a Unabomber or anthrax-laden package.
I called Federal Protective Services. They brought in the dogs. The hallway was cleared. The package was sniffed and then opened.
In the end, there was nothing dangerous in my mail. It turned out our defendant was so impressed with the FTC’s dogged determination to pursue him and his cohorts that he wanted us to take on the case of his defective hot tub. I left the FTC in 2004. Doug is still there leading a team of attorneys and investigators who fight for consumers. But that moment, in 2001, when I realized that even people who did not like the FTC’s work respected our results—that was my FTC moment.