WASHINGTON-A U.S. district court judge in New York ruled March 12 that Joseph Viggiano, a principal of telemarketing concern Micom Corp., was guilty of selling fraudulent Federal Communications Commission paging license application services, forcing Viggiano to post a $500,000 performance bond against any future wrongdoing along with assessing him and the company $1.6 million in fines to help recover fees from clients who were defrauded.
In the same action, Judge Sonia Sotomayor dismissed action against Micom co-owner Lawrence Williams. Because Viggiano, as both an owner and as chief financial officer of Micom, ran the day-to-day business, “he had actual or constructive knowledge of Micom’s failure to perform services” and “was in a position to control the deceptive practices of Micom.” He was the only individual to be charged along with the company as a whole. The Federal Trade Commission also pointed out that Viggiano had been involved in FCC telemarketing schemes prior to the formation of Micom, and that he was forming another telemarketing company at the time the complaint was filed.
As a result of the court’s decision, Viggiano and others associated with Micom now are prohibited from promoting and/or selling any government-related licenses, any investment that includes any part of a license, misrepresenting the risk involved in any type of investment and violating any federally set telemarketing rules.
Viggiano’s $500,000 bond must be maintained from March 12 until five years following his departure from any telemarketing venture. He must not disclose this bond to any prospective investor unless he also explains why he had to post such a bond. Viggiano and all those associated with him also are prohibited for seven years from destroying any business paperwork, from failing to maintain records of any transaction between Viggiano and possible investors, from keeping accurate financial books and from keeping records regarding any complaints or refund requests.
Viggiano also must keep the FTC apprised of his business dealings, including locations, and he must advise any new business partners and subordinates of this case and its outcome.
The original FTC complaint against Micom was filed in January, 1996, and sought a permanent injunction against the company-which had been accused of “falsely and misleadingly” representing its services since at least November, 1994-and monetary damages. According to the complaint, Viggiano (who used the name “James Templeton” when dealing with Micom customers), Micom and other agents told “potential and current investors” that “they were highly likely to earn substantial profits through leasing or selling their licenses to other paging businesses, that they would derive income or profit from their licenses without constructing a paging system themselves, that no entity or individual could obtain multiple paging licenses directly from the FCC for use in a given geographic area; that the FCC typically required a paging license applicant to submit or conduct engineering studies, site analyses, environmental impact statements, service coverage maps or interference studies for the types of licenses acquired through defendants’ services; that the purchase of paging licenses through defendants’ application services was a relatively low-risk, excellent investment likely to generate substantial profits; and that customers would receive a 100-percent refund for payments to Micom for any license they did not receive.”
The FTC claimed that Micom received at least $1.65 million from paging-applicant customers, but that “Viggiano and Micom failed to perform the promised application and filing services for a considerable number of clients.” No refunds were made, and Viggiano received at least $474,000 from the proceeds.
