For Release: 12/21/2009
FTC Seeks Scam Marketer’s Assets in Bankruptcy Court to Repay Money Owed to
Consumers
The Federal Trade Commission has filed a complaint in bankruptcy court
seeking assets from the operator of a defunct money-making scam, so that those
assets can be used to help pay more than $17 million that he owes consumers as a
result of a court judgment against him.
The $17 million judgment the Commission is trying to recover stems from a
lawsuit the Commission filed in 2004 against John Stefanchik and his company,
Beringer Corporation, who deceived consumers with false promises that his
program would teach them how to make large amounts of money in a short time by
selling promissory notes and mortgages. (
See May 21, 2007 press release
http://www.ftc.gov/opa/2007/05/stefanchik.shtm)
In 2007, the trial court found Stefanchik and Beringer made false claims and
ordered them to pay more than $17 million in restitution to consumers. The
following month the FTC filed a judgment lien on a house owned by Stefanchik and
his wife. The U.S. Court of Appeals for the Ninth Circuit subsequently affirmed
the trial court’s judgment.
The FTC bankruptcy court complaint announced today seeks to collect the $17
million judgment, and charges that the defendants have tried to shelter assets.
The complaint alleges that Stefanchik was aware of potential legal problems as
early as 2000. So in 2001, he formed Warwick Properties LLC as a “shell” to
shelter their house from creditors’ claims. According to the complaint,
Stefanchik made his wife, Heidi Fogg, the sole owner of Warwick and then
transferred assets to Warwick, including their home, which is now valued at more
than $5 million. The Commission contends that Warwick should be liable for the
judgment against Stefanchik and Beringer. It seeks to recover payments and
transfers that Stefanchik and Fogg made to Warwick as fraudulent transfers.
The defendants are Warwick Properties, Fogg, and Stefanchik. The Commission
vote to authorize staff to file the complaint was 4-0. The complaint was filed
in the U.S. Bankruptcy Court for the Western District of Washington, where
Warwick’s Chapter 11 bankruptcy case is pending.
NOTE: The Commission files a complaint when it has “reason
to believe” that the law has been or is being violated, and it appears to the
Commission that a proceeding is in the public interest. A complaint is not a
finding or ruling that the defendants have actually violated the law.
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.
- MEDIA CONTACT:
- Frank Dorman,
Office of Public Affairs
202-326-2674
- STAFF CONTACT:
- Kimberly Nelson,
Bureau of Consumer
Protection
202-326-3304
(FTC File No.
X040072)
(Stefanchik)
