State attorney general going after LV telemarketer’s funds

Grace Leong

Thursday, April 13, 2000 | 10:17 a.m.

The State Attorney General's office wants to seize funds from an alleged fraudulent Las Vegas "boiler room" telemarketing operation that it says sold sham diet and herbal products nationwide.

In a Clark County District Court lawsuit, the Nevada attorney general's office said it is entitled to $40,263 in proceeds it seized during a Feb. 10 raid at Shop From Your Home, a 150-worker telemarketing operation owned by Brian Keith.

The suit alleged Keith committed a felony when he failed to register himself as a telephone seller or salesman with the Nevada Consumer Affairs Division.

Neil Beller, Keith's attorney, declined comment on the allegation.

Brian Kunzi, assistant chief deputy attorney general, said the Bureau of Consumer Protection raided Shop From Your Home, at suite 440, 1785 E. Sahara Ave., following numerous complaints to the Consumer Affairs Division from consumers who said they were stonewalled in their attempts to get refunds from the company.

The suit said Shop From Your Home operated under other names including Wealth Through Health Investments, Keith Investments Inc., National Distribution, Doctors Wellness Network, Better Health Products and American Home Shopping Club, all of which are companies located in various suites in the same East Sahara office building.

Officials said Shop From Your Home telemarketers posed as weight-loss consultants, cited false medical support and claimed consumers could eat pizza, fried chicken and french fries and still lose weight. The consumers were also told they have a money back guarantee, officials said.

The products bore such names as Fat Eliminator, Colon Cleanser, Calcium Pyruvate and Crave Cure. These substances aren't regulated by the Food and Drug Administration, Kunzi said. The raid resulted in the arrest of 37 people -- some identified as higher-level managers -- on charges of deceptive trade practices, obtaining money under false pretenses and unregistered telemarketing. Business records, computers, bank documents and tons of diet pills were also seized.

A week after the business was shut down, a state investigator, John Heide, said in a Feb. 17 affidavit he learned Keith had allegedly sold the company to Wealth Through Health and that 12 former Shop From Your Home supervisors were recruiting sellers and starting a new telemarketing operation there. An administrative action was filed Feb. 17 by the Consumer Affairs Division against Shop From Your Home, Wealth Through Health and the 12 supervisors to determine if the defendants were using the same deceptive tactics to sell the product.

But Grenville Pridham, deputy attorney general, said the action was dismissed Monday in favor of the defendants by Consumer Affairs' hearing officer Ron Shutt because the attorney general's office refused the defendants' request to access the seized business records including lead sheets, which contained customer information and buying patterns. He said the state office feared the defendants may abuse the information.

Beller said, "In light of the dismissal, we're seeking to recover all funds seized, keeping in mind, there are still criminal charges. But neither the principal Keith, or Shop From Your Home, have been charged criminally, so there is no reason for the state to hold onto the funds."

A criminal complaint against the 37 people who were arrested is pending.