FROM:
Alvin G. Weger, Assistant District Attorney   CONTACT PERSON:
Robin B. Wakshull, Deputy District Attorney
Consumer Protection Unit
(408) 792-2584   For Release on January 24, 2003   DA SETTLES SUIT OVER PHONY INVOICES FROM STEALTH INTERNATIONAL   The Santa Clara County District Attorney’s Consumer Protection Unit has settled a civil lawsuit against Edward Goldberg, doing business as Stealth International, for violating state statutes that prohibit untrue and misleading advertisements and unfair competition. As part of a marketing plan, Goldberg mailed statements that looked like invoices, but were really just solicitations to sell goods and services, to thousands of local businesses.   The judgment was signed by Santa Clara County Superior Court Judge Kevin E. McKenney and provides for injunctive provisions and the payment of civil penalties and costs in the amount of $35,000. Goldberg cooperated with the investigation and consented to the entry of judgment. All of the checks that had been sent by businesses to "pay" the invoice were returned as part of the resolution of the case.   The investigation was conducted by the District Attorney’s Office and the U.S. Postal Inspection Service, both of which received dozens of complaints from businesses. Most business owners were upset and offended by what they characterized as a scam and attempt to trick businesses into paying for services that were neither requested nor received. The invoices were directed to the attention of "Accounts Payable" and described the services as Occupational and Environmental Health and Safety Comprehensive Building Security Assessment and a building mold evaluation and guidance report. Over one hundred business sent checks in response to the invoice because the accounts payable department believed the services had been rendered. In fact, the mailing was a solicitation: No inspection or evaluation had been performed, no report had been sent and no money was due or owing.   Both federal and state statutes explicitly forbid using an invoice or any writing that could reasonably be considered a bill, invoice or statement of account due unless it contains a disclaimer in conspicuous, bold type on the face of the solicitation, no smaller than 30-point type, in contrasting color to the background and immediately below each portion of the solicitation that may be construed to specify an amount due and payable. The disclaimer must be in the specific language set forth in either California Civil Code section 1716 or Title 39 of the United States Code section 3001.   The California statute requires the following language to be displayed on any invoice that might reasonably be construed as an invoice or bill:   "THIS IS NOT A BILL. THIS IS A SOLICITATION. YOU ARE UNDER NO OBLIGATION TO PAY THE AMOUNT STATED ABOVE UNLESS YOU ACCEPT THIS OFFER."    

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