FTC: Alleged fraudsters may still be renewing subscriptions
The Federal Trade Commission has found signs that accused Southern Oregon fraudsters who made millions on the backs of unwitting newspaper subscribers allegedly are still involved in the business of renewing subscriptions, despite terms of a 2015 settlement with Oregon's attorney general.
Accounts belonging to Jeffrey Hoyal, who the FTC says received among the largest shares of profits in a myriad consortium of businesses based in White City that worked together to renew subscriptions, point to continued involvement in similar schemes, according to documents filed in U.S. District Court in Medford. The FTC has found Hoyal's credit union records show that one of his businesses was paid six figures last year by a Utah-based company with relationships to others in the suit.
Between June and December, Hoyal & Associates was paid $151,239 by Utah-based company Sun First Data Holdings, court documents show. The FTC filing seeks Rogue Credit Union account records up to the present belonging to Jeffrey Hoyal, his wife, Lori, and any related businesses.
In the filing, the FTC says it's received new complaints of similar deceptive mailers as recently as last month, tied to another company with the same owner as Sun First Data Holdings.
"The Hoyal Defendants have repeatedly insisted that they are no longer involved in the subscription business ... evidence already obtained by the FTC indicates otherwise, and the updated records from Rogue Credit Union will show whether the Hoyal Defendants continue to be involved," the court document says.
The FTC's lawsuit, first filed in April 2016, names more than a dozen individual defendants and 94 businesses that allegedly worked together in a "common enterprise" to renew subscriptions at high mark-ups solicited from mailers that looked like genuine renewal notices. Companies with different heads handled facets of printing mailers, orders and processing, sometimes using alternate "doing business as" names.
The source of Hoyal's late-2016 payments was Sun First Data Holdings, controlled by Ryan Azares, whose companies also include Bright Advertising, which purchased assets of multiple companies named in the FTC suit.
According to the FTC filing, Bright Advertising continues to generate complaints from newspaper subscribers.
"As recently as last month, consumers have forwarded to the FTC deceptive subscription mailers from Bright Advertising," the document says.
Companies involved in the FTC lawsuit admitted no wrongdoing but settled with the Oregon Attorney General's Office in June 2015 for $3 million, plus $500,000 in restitution. Terms involved with the settlement prohibited them from engaging in further newspaper-renewal businesses.
Hoyal's lawyers last week argued that the "conduct at issue" ceased in the middle of 2015, but asked the court to deny the FTC's request out of privacy concerns.
"Furthermore, the information will go not only to the FTC, but each of the other Defendants, including Dennis Simpson, who has a vendetta against the Hoyals since Jeff Hoyal ended their personal and professional relationship in 2015," Hoyal's filing said.
Over the past year, Simpson, whom the FTC alleges has been Hoyal's partner in the scheme, has filed multiple lawsuits against Hoyal and Hoyal's companies in Jackson County Civil Court.
The FTC argues that the new subpoena for account records should be honored because the previous subpoena that yielded the suspicious payment went uncontested in March.
"Indeed, the fact that the Hoyal Defendants are objecting now, having failed to object to the same subpoena eight months ago, strongly suggests the bank records generated since Rogue Credit Union's last production contain evidence that supports the FTC's claims and/or undercuts the Hoyal Defendants' defenses," the complaint says.
Hoyal previously has stated he only worked as a consultant for the businesses and has denied any wrongdoing, but the FTC argues that Hoyal has "maintained control over key aspects of the deceptive newspaper subscription operation."
— Reach reporter Nick Morgan at 541-776-4471 or email@example.com. Follow him on Twitter at @MTCrimeBeat.