Adams Sentenced To Over 17 Years In Prison For Multi-Million Dollar Telemarketing Fraud Scheme
ATLANTA, GA - KARA SINGLETON ADAMS, 40, of Marietta, Georgia, was sentenced to federal prison today by United States District Judge Charles A. Pannell, Jr. on charges of conspiracy, wire fraud, structuring, and obstruction, as part of a multi-million dollar telemarketing fraud scheme.
United States Attorney Sally Quillian Yates said, “The defendant’s businesses preyed on consumers who were in debt and wanted to reduce their credit card payments. Adams will now spend 17 years in prison for defrauding these victims of their hard-earned money.”
United States Postal Inspector in Charge Keith Morris said, “These aggressive telemarketers were criminals hiding behind a phone, and their key sales pitch was aimed at people who were already having financial problems. Our Postal Inspectors tracked them down, and the detailed evidence we gathered helped to hang up their phones, once and for all.”
ADAMS was sentenced to 17 years, 6 months in prison to be followed by 3 years of supervised release, and ordered to pay restitution in the amount of $1,030,000. ADAMS was convicted of these charges on November 7, 2011, after a two-week long trial. Specifically, ADAMS was found guilty on 9 counts of wire fraud, 7 counts of structuring financial transactions and 2 counts of conspiracy.
Three co-defendants had already been convicted and were sentenced on January 6, 2012, for crimes related to the fraud scheme. JASON JAMES EYER (ADAMS’ husband), 36, of Marietta, was sentenced to 10 years, 6 months in prison. JAMES ADOLPH SCHOENHOLZ, 39, of Atlanta, Georgia, was sentenced to 2 years, 6 months in prison. BRITTANY DUNPHY, 40, of Orlando, Florida, was sentenced to 1 year, 3 months in prison.
According to United States Attorney Yates, the indictment, the charges, and evidence at trial: Starting in 2008 and continuing through December 2009, defendants ADAMS, EYER, SCHOENHOLZ and DUNPHY conspired to defraud consumers with “credit card interest rate reduction” programs through a variety of schemes and companies. Using various company names, the defendants initiated automated telephone calls to consumers throughout the United States to promote the sale of the so-called credit card interest rate reduction program. Consumers were either greeted by a pre-recorded message instructing them to “press 1 now” if they would like to have their credit card interest rates lowered or directly solicited by a live telemarketer offering to lower the consumers' credit card interest rates. Consumers who pressed “1” were connected to a live telemarketer, who used a script promising to substantially lower the consumers' credit card interest rates and save the consumers thousands of dollars in interest payments. The telemarketers claimed they had a special relationship with the creditors which would allow them to negotiate lower rates on the consumers’ behalf.
The consumers were told that they would become debt-free much faster, typically three to five times faster, than they would without the program. Consumers were also guaranteed that their monthly payments would be no higher than their current monthly payments on their credit card accounts. The consumers were assured that there was no out-of-pocket cost associated with the interest rate reduction program. They were promised that the savings of the program would cover the cost of the program, which was typically between $749 and $1,495. Consumers were also told that this savings would be realized within 30 to 45 days, and were promised a full refund of their purchase price if they did not achieve $4,000 in savings.
According to the evidence, the victims did not receive what they were promised. The defendants had no special relationships with any creditors. In many instances, no attempt was made to negotiate a lower interest rate for consumers’ credit cards. Even when the telemarketers actually cold-called a victim’s credit card company, often the interest rates were not lowered and the victims did not save the thousands of dollars promised in the sales pitch.
ADAMS, EYER, SCHOENHOLZ and DUNPHY then took additional steps to mail those victims a fake “financial analysis” payment plan with figures which had been purposefully manipulated to show a savings of at least $4,000, when, in fact, no savings had been realized. The defendants used this falsified payment plan “savings” to claim that they had satisfied the program’s guarantee and deny the victims who sought refunds of the $749 to $1,495 in fees that they had paid.
The companies involved in the scheme included: “Economic Relief Technologies,” (ERT), formerly at 1820 Water Place, Suite 250, Atlanta; “SafeRide Warranty,” formerly at 1820 Water Place, Suite 255, Atlanta; and “VP Marketing,” (VPM), formerly at 1820 Water Place, Suite 195, Atlanta, Georgia.
The group also used many other names, such as: “Clear Breeze Solutions;” “Money Works;” “Client Services;” “Financial Protection Center;” “Life Change Solutions;” “Express Debt Elimination;” “Capital Resources;” Express Corp Advisor;” “Express Corp;” “Card Services;”“Credit Services;” “Americare Software Solutions;” “A Better Tomorrow;” “Helping Hand Resources;” “Auto Protection Center;” “Warranty Services;” “Auto War;” “Assured Warranty;” “Debt Suite, Inc.;” “Total Curb Appeal, LLC;” “Debtworks Software, LLC;” “DM Associates, LLC;” “VersaDebt Corp;” and “FYI Tech, Inc.”
The victims were located in over 40 states with the losses totaling several million dollars. In a little over a year, ADAMS and EYER spent millions of dollars of proceeds from the scheme at a variety of luxury hotels, high-end retailers, jewelers and casinos, and also purchased exotic automobiles.
On November 30, 2009, the Federal Trade Commission obtained a temporary restraining order against ADAMS, EYER, and SCHOENHOLZ, and a federal judge appointed a receiver to take over the companies and find any and all assets derived from the fraud.
Evidence at trial showed that, at the time the FTC issued the restraining order, the three were in the Philippines attempting to start up a similar business. While in the Philippines, ADAMS contacted her family members, LEIAH WATSON, 33, and ROGER DALE WATSON, 41, both of Atlanta, instructing them to remove company documents and computers from her Marietta residence and hide them, in violation of the federal judge’s order, in an attempt to obstruct the FTC receiver’s investigation. DUNPHY later obtained the computers and documents, sold the computers and wired the proceeds to EYER in the Philippines.
On October 6, 2011, LEIAH and ROGER WATSON pleaded guilty to violating a court order; and on December 20, 2011, they were sentenced to one year of probation.
This case was investigated by Inspectors from the United States Postal Inspection Service, and investigators of the Georgia Governor’s Office of Consumer Affairs.
Assistant United States Attorney Jeffrey W. Davis prosecuted the case.
For further information please contact Sally Q. Yates, United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney's Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is www.justice.gov/usao/gan.