A.G. Schneiderman Secures Financial Relief For Hundreds Of Debt-Ridden Soldiers In North Country
Company Preyed on Soldiers and Destroyed Their Credit Ratings
Schneiderman: While Soldiers Were Fighting Overseas, This is the Last Thing they Needed to Worry about at Home
WATERTOWN - Attorney General Eric T. Schneiderman today announced that his office has secured a $3.5 million settlement with a financing company that will result in hundreds of soldiers being relieved of their financial debt.
Last year, the Attorney General's office began investigating a kiosk and small storefront at the Salmon Run Mall, near Fort Drum when it appeared to be marketing specifically to soldiers. Sales clerks would aggressively push the sales of electronic equipment such as laptops, gaming systems and flat screen televisions to soldiers. At the time of the sale, SmartBuy sales representatives would not take cash payments for the merchandise and instead pressured soldiers to enter into payment contracts with hidden fees and exorbitant interest rates.
The investigation revealed that the SmartBuy's Salmon Run Mall Kiosk was part of a larger scheme to defraud service members by deceptively reselling them computers and electronics at wildly inflated prices, and locking the soldiers into revolving credit agreements with undisclosed fees and very high interest rates--all paid directly from military paychecks to unlicensed lenders. SmartBuy purchased merchandise from stores like Sam's Club, Costco, and Walmart. The items were then marked up by 200-325 percent, then included an added interest of 10-25 percent. The interest rates averaged out at 244 percent.
The storefront, "SmartBuy," abruptly ceased local operations in 2010 upon learning of the Attorney General's demands that it cease its deceptive business practices and reimburse defrauded soldiers. The Attorney General's office commenced suit against all involved parties in April 2010. Litigation is currently underway in New York State Supreme Court in Jefferson County against the remaining solvent companies. The five affiliated entities include, Frisco Marketing of N.Y., LLC, doing business as SmartBuy and SmartBuy Computers and Electronics; Integrity Financial of North Carolina, Inc.; Britlee, Inc.; GJS Management, Inc.; and Rome Finance Co. LLC, all owned and/or operated by Fayetteville, N.C.-based John Paul Jordan, Stuart Jordan and Rebecca Wirt, and Concord, California-based William Collins and Ronald Wilson.
According to the terms of the Attorney General's settlement, Rome Finance Co., Inc., the first financing company to settle, will release approximately 995 soldiers who entered into contracts in the State of New York, or who sought protection in New York State. The value of this first resolution with the bankrupt defendant is $3,530,090.58 of relieved debt, and represents a significant step forward in this litigation.
The investigation revealed that hundredsof soldiers fell victim to SmartBuy's actions, including:
This matter is being handled by Attorney General In-Charge for the Watertown Regional Office, Deanna Nelson under the supervision of Deputy Attorney General for Regional Affairs Martin J. Mack.