凍結 天然氣 火車

But the bottom line is if somebody is engaged in fraud like this there is almost nothing the government can do to stop the fraud. And if you have been screwed by folks like this even if you sue them and win in court, there isn't much the government can do to force them to pay you the money you won.

I worked for two companies that were operated like this article accuses John Common of operating. They were Troy Warren's "Search Big Daddy" and Richard Kuhlmann's "E-Merchant Direct".

Both businesses were accused of screwing people left and right. Both companies denied doing anything wrong. And both owners continue to operated their businesses despite being accused of screwing people.

And of course neither Troy Warren or Richard Kuhlmann have been convicted of any crimes.

Source

Scottsdale businessman accused of fraud in business failures

by Robert Anglen - Feb. 11, 2012 11:05 PM

The Republic | azcentral.com

Despite a history of state and federal investigations, consumer-fraud allegations dating back nearly 15 years and a chain of closed companies, a Scottsdale businessman continues opening and operating call centers.

An Arizona Republic investigation tracked the practices of John Common, who has been a defendant in nearly 100 lawsuits and owes more than $26 million in unpaid court judgments. He has been accused by attorneys general and financial regulators in eight states of operating unlawfully or defrauding thousands of customers.

Call-center employees said Common didn't pay them. Suppliers sued him for failing to pay bills. Investors and business partners claimed he drained the companies he operated. Customers complained by the hundreds that his companies sold them questionable products.

The accusations didn't put him out of business. Instead, Common opened new call centers, pitching everything from car warranties and fuel-saving automotive devices to roofing contracts and home-mortgage modifications.

Authorities across the country have filed lawsuits and issued orders to stop at least two of his companies from doing business. They accused his companies of making false and misleading statements, failing to provide promised services and unlicensed activity. Four of the cases remain open, and others have been closed with judgments, settlements and fines.

Arizona's attorney general filed a lawsuit in 2010 alleging that homeowners paid thousands of dollars to Common's company for "guaranteed" home-loan modifications they never received.

The Republic's investigation uncovered how Common has moved from one closed business to another over the past decade, most recently in Arizona and earlier in Nevada and Washington. Allegations of consumer fraud and improper use of company funds frequently followed.

Common never has been charged with a criminal penalty related to his business activity. He denies any wrongdoing.

Authorities, including the Arizona Attorney General's Office, treat consumer-fraud allegations as civil matters. They closed investigations after filing civil lawsuits and imposing fines.

Records and interviews show that the Federal Bureau of Investigation and state law-enforcement agencies have twice executed search warrants on Common's businesses and once on his home. At least two of Common's past business partners said they provided evidence to federal and state investigators.

Court documents, corporation records and interviews show Common has walked away from at least 10 businesses, hundreds of thousands of dollars in state and federal tax liens and more than $52,000 in unpaid child support. He left business partners and at least three of his four ex-wives facing mounting debt and legal trouble only to start new ventures with financial backing from new partners.

Relatives, former business partners, employees and other associates describe Common as a smooth-talking genius who persuades investors to put their names on businesses that he controls. Once businesses are up and running, he is accused in case after case of draining company credit lines and bank accounts to pay for lavish personal expenses.

Records from the loan-modification company, Discount Mortgage Relief, show that in 2010 Common spent tens of thousands of dollars in company funds to buy plane tickets, $1,000-a-night hotel rooms, trips and luxury items. Credit-card receipts show the airline tickets were purchased in eight different women's names during a six-month period.

Common refused to discuss his past or answer specific questions about the expenditures of company funds.

He did not respond to a series of questions that were e-mailed to him on Jan. 30. He declined additional comment to The Republic when approached in person after a family-court appearance in Mesa on Jan. 31.

In brief interviews in November, Common described himself as a misunderstood businessman under fire from a small percentage of dissatisfied customers. He blamed company failures on business partners and pointed a finger at his fourth ex-wife for raising issues because of a child-custody dispute.

"Totally unfounded," he said of consumer-fraud allegations. "I generated a huge number of (satisfied) clients." Complaints in Arizona

Common has been involved in five call-center companies since coming to Arizona in 2004, according to court filings, corporation records and interviews. At least three of those closed amid controversy.

Aslam Dulara, his business partner in 2011 at a call center on East Bell Road, alleged Common took money and didn't pay employees.

Bruce Spurlock, Common's partner in Discount Mortgage Relief, accused him of taking money from the company.

Dominic Piermarini of Scottsdale was Common's partner in 2008 at another closed call center, which did promotions for car dealers. Piermarini said he discovered that false promises were being made to consumers, and he closed the company.

The consumer website ripoffreport.com is filled with claims from customers who say they purchased car warranties that had no financial backing or paid thousands in fees for home-loan modifications that never went through.

Complaints also come from former employees at call centers. Amanda Norberg and Morgan Solomon worked for Common at a call center he operated last year on East Bell Road in Phoenix. Norberg and Solomon are among dozens of employees in their late teens and early 20s who took jobs there and say they were promised pay of $150 to $200 a week.

"Two of my checks bounced," said Norberg, 20, who worked at the call center for about a month.

A copy of an employee check obtained by The Republic shows that it was written on a closed account. Officials at a Wells Fargo branch in Phoenix confirmed that they refused to honor "a lot" of checks written on the defunct account.

Common acknowledged that he was a signer on the account but blamed his former business partner Dulara.

"Those accounts were controlled by him," Common said in an interview. "I never wrote the checks."

Dulara said he wasn't aware of any problems until being notified by the bank that his business account was overdrawn.

Dulara said that he partnered with Common while waiting for his automotive-dealer license to be approved by the state. He said he allowed Common to set up a call center in an empty building and agreed to provide a small measure of capital.

"I put him as a signer on the account, and a few months later I found out it was $12,000 negative," said Dulara, who has been in the Valley automotive business for 28 years.

Dulara said that when he realized employee checks were bouncing, he paid them.

"I'm the one who tried to make it right," Dulara said. "These checks were in my name. My mistake was putting (Common) on the account."

Common, who said he is now working as a "consultant" for a new Phoenix call center, would not discuss specific details of the allegations.

He said they were "crazy."

Loan-modification allegations

In 2009, Common tapped into the nation's housing crisis by operating a call center that offered loan modifications.

Discount Mortgage Relief closed in 2010 after an FBI raid of its offices and an investigation by the Arizona Attorney General's Office, which sued the company under the state's Consumer Fraud Act.

According to Arizona prosecutors, the company guaranteed loan modifications that it never delivered to thousands of customers who paid up to $5,000 in up-front fees.

Prosecutors cited numerous false claims made by company sales representatives, including that the company was FBI-certified; that it had a 100 percent success rate in getting loans modified; and that it provided full refunds.

Authorities and regulators in other states also filed cease-and-desist orders against Discount Mortgage Relief, prohibiting it from conducting business.

After the Maricopa County Superior Court issued a preliminary injunction against the company in July 2010, authorities said Common began selling new loan modifications under the name Mortgage Center Relief.

Discount Mortgage Relief President Bruce Spurlock, who settled the civil case with the Arizona attorney general by agreeing to stop operations and pay a fine, said he was as much a victim as any of his customers.

Spurlock said that many people did get the loan modifications they sought.

He said that his first inkling of trouble came after federal authorities executed a search warrant in April 2010 and seized 158 boxes of company records. Over the next several months, Spurlock said he learned that the company was $1.5 million in debt. He said at least $490,000 of company money was misspent by Common.

According to Spurlock, Common was responsible for running the operation and for designing computer databases used to track everything from business expenses to customer-loan files. He said Common mismanaged customer accounts, didn't pay employees and helped himself to money that was supposed to pay operating expenses.

"He bought a car for one girl ... and leased a house for another," Spurlock said.

Like many of Common's business partners, Spurlock did not file a lawsuit against Common. He said he turned to the state for help and worked for months with investigators.

Spurlock, who retired as a Procter & Gamble manager before spending 11 years as vice president of a major food-manufacturing company, said Discount Mortgage Relief went from 180 employees, with credit lines and a steady client base, to broke in a matter of months.

"This has destroyed me," Spurlock said. "I really believed we were helping people."

Among Common's expenses was $100,000 in funds wired to his mother in Europe, Spurlock said.

Common structured the expense as a business loan, Spurlock said, adding that Common was not authorized to make such a loan, and the money was not repaid.

Spurlock said Common told him that he could not be "named" in corporation documents because of unresolved tax issues. Instead, Common's fourth wife, Elizabeth Muelhaupt, was named a company director and co-owner.

Muelhaupt, who today lives in Scottsdale with three of the couple's four children, said her former husband assured her that she would not be held liable for the business.

She described herself as a housewife who had never made business decisions.

In the aftermath of the federal and state investigations, Muelhaupt said she found herself thousands of dollars in debt to various company suppliers and facing fines from state regulators. She said she also learned that her husband had used the fees people paid for home-loan modifications to help fund a secret life.

"I had no idea," she said. "He used me the same way he used everybody."

Lavish personal expenses

A financial review by Spurlock and Muelhaupt offers details that Common spent company money to position himself as a millionaire jet-setter who could afford to shower women with expensive trips and luxury gifts.

Common had no comment on questions related to his expenses.

Spurlock said his review of company expenses and another undertaken by American Express found that Common used company funds for trips, limousine services, dinners, shows, concerts and other expenses.

Company financial documents provided by Spurlock and Muelhaupt and interviews with Common's former girlfriends and associates show that he used company funds to help pay expenses for multiple relationships.

In one week in March 2010, he paid for tickets in three different women's names to fly to or from Las Vegas and Phoenix, company American Express records show.

"He told me his wife died of cancer," said 43-year-old Kelly Wyand of Vermont. "He led me on."

Wyand said Common told her he was a millionaire business owner. Wyand said she dated Common for a few months.

Records show she made at least six trips from Vermont paid for with the company credit card. On one of those trips, records show Common paid $492 to fly Wyand to Las Vegas and $6,337 for four nights at the Four Seasons Hotel.

Common also used company funds to buy a car for Wyand to use. The car was later repossessed by Discount Mortgage Relief as an unauthorized business expense.

Financial records and interviews show during the same months he dated Wyand, he also paid for plane trips and hotel stays with a California woman.

Carrie Cleveland, 35, said she was charmed by Common, who told her he was a divorced father.

Cleveland, who lived in the San Francisco Bay Area, said Common asked her to manage a medical spa he was opening in Southern California. At Common's urging last year, Cleveland said she quit a $70,000-a-year job, gave away her furniture and moved to Los Angeles to seek a home and office space.

"Every time I sent him a lease, he wouldn't respond," Cleveland said. She added that she soon discovered Common was married and that the promised spa and managerial job were lies.

"I ended up with no place to live, no furniture and no job in LA," she said.

Common also used company funds to lease a house for a third woman until those payments were discovered by Sperlock and Muelhaupt. The house, located about a mile from the home Common shared with his wife and children in north Scottsdale, was for Common's 21-year-old personal assistant.

"I thought he was just a decent guy, trying to help me out," said Carly Echard, Common's former personal assistant.

Echard, who said she did not have an intimate relationship with Common, said he offered to lease the single-family home to her as part of her employment. She said she paid Common $500 a month for rent out of her $4,000-per-month salary.

"I feel bad about what he did to all of those people," Echard said, adding that she quit the company after being evicted from the home and discovering that Common had misled her that he owned it. Complaints in Nevada

Common moved to Arizona from Nevada in 2004, on the heels of a federal investigation into call centers he operated in Las Vegas.

Venture capitalist and former securities broker Larry Choy said federal authorities in Nevada contacted him about his then-business partner, Common, in 2003.

FBI interviews were followed by two days of testimony in front of a grand jury.

"I can't understand how he keeps skirting around investigations and the law," Choy said in an interview.

In 2002, Choy helped Common launch a call-center operation in Las Vegas marketing car warranties. Choy said they had as many as 800 employees, two large offices with purchase options and a profitable business model.

As with Arizona's Discount Mortgage Relief, Common was not named in Nevada corporation documents. Records for a company called Chinook Holdings listed Choy as president and Muelhaupt as treasurer.

Common refused to discuss his Nevada business.

In a series of e-mails, Choy, who lives in Alameda, Calif., described his relationship with Common.

He said he first met Common in Seattle around 1999, where Common operated a call center marketing car warranties that Choy said generated up to $400 million a year in business. The business, Warranty USA, later dissolved amid lawsuits, bankruptcy and court findings that Common misspent millions in company funds.

Choy said he was cautious about partnering with Common. He said he questioned Common about the failure of Warranty USA, which Common blamed on legal disputes with his business partner and an ex-wife. Choy said Common talked candidly about the fact that he owed back child support, which prevented him from putting his name on business licenses.

Choy agreed to serve as company president, sign various licenses and put up capital to start the business.

"Business grew, and the reports looked great," he said in an e-mail.

Choy said he felt as if he and Common were friends. After Common lost his Nevada house over a lawsuit filed by a Seattle creditor, Choy said he leased Common a new one. He also helped pay for Common's Hawaiian wedding to his fourth wife, Muelhaupt, and served as best man.

The relationship soured when Choy said customers complained that warranties were not being honored and he discovered that the insurance company hired to back policies had never been paid.

Choy said he discovered that Common and Muelhaupt used a rubber stamp to put Choy's name on company checks.

Choy said Muelhaupt knew more about the business than she let on. He said she enjoyed the luxuries, adventure and excitement of her husband's lifestyle. Choy said Muelhaupt is smart and kept close track of bank accounts.

Muelhaupt said she had no part in the business. She said she followed her husband's instructions and said he had a careful explanation for every lawsuit, every search warrant, every consumer complaint.

"Too many things started to make me very uncomfortable," Choy said. "I figured that the money that I invested, and the reports that it had grown to $1.4 million (were) all false and I would never see it."

Choy said he cooperated with federal investigators. FBI agents raided the call centers and executed search warrants on Common's house and businesses. No charges were filed. Judgment in Seattle

Common moved to Nevada from Washington, where he launched his first call-center operation in Seattle in the 1990s. It was his biggest financial success and his most expensive failure.

Common, who was born in Colorado, spent most of his childhood in Europe and Iran. He moved to Washington in the late 1970s after fleeing Iran's Islamic revolution.

In 1997, he started Warranty USA, which sold car warranties through postcard mailings and call centers in Seattle and Las Vegas. Court records show that Warranty USA used information such as vehicle-identification numbers to target specific car owners, who received mailers asking them to call an 800 number to discuss their cars.

The company generated consumer complaints in several states, including Minnesota, where the attorney general sued, alleging fraud and false advertising.

Texas authorities also sued the company in 2000 for deceptive advertising, leading to a $100,000 settlement. In 2001, Texas officials raised new concerns and issued a consumer alert warning residents that Warranty USA was not licensed to do business in the state.

The company foundered after a 2002 lawsuit accused Common of using company funds for personal expenses.

A.I. Credit Corp., an arm of insurer American International Group, said in its suit that Common used a $30 million credit line, meant to ensure warranty refunds for policyholders, to buy homes, vacations, cars, furnishings, real estate, expensive meals and other non-related business expenses.

A court-appointed receiver told the court that Common's "lavish lifestyle" and his mismanagement contributed to the insolvency of Warranty USA and its affiliates.

A federal judge ordered Common to stop spending company money and placed the company in receivership, but Common continued to rack up bills at expensive restaurants, court documents show. The judge held Common in contempt.

Common refused to discuss Warranty USA. But in 2002, he told the Seattle Post-Intelligencer that company troubles were unrelated to his personal spending. He admitted borrowing $2 million from the company but denied it had any impact.

"To say that my compensation and my personal lifestyle contributed to the demise of the company is totally insane," Common told the newspaper.

As many as 50,000 customers who bought warranties from Warranty USA still had claims pending when the company went under, records show.

In 2002, Common filed Chapter 11 petitions for Warranty USA and several company affiliates. A judge, however, found that Common personally guaranteed the $30 million credit line and ordered him to repay AIG $26.5 million plus interest.

Records show the debt remains unpaid.

No criminal charges

Common's former business partners, former employees, former girlfriends and his fourth ex-wife all ask the same question: How can he continue operating and avoid state and federal criminal prosecution?

Former U.S. Attorney for Arizona Paul Charlton said the answer may lie in the government's ability to prove intent. He said obtaining a criminal conviction in a white-collar fraud case requires prosecutors to prove beyond a reasonable doubt that an individual set out to commit a crime.

Charlton, who is now in private practice, said one of the most common defenses is for the accused to claim that they are bad at business rather than criminals.

Suspects will say they never intended to lose money or that they always meant to repay investors or that bad management led to losses, Charlton said.

"It is true you can use prior evidence to prove intent," he said. "And if it happens time after time, that defense becomes less credible."

Chuck Boyd, special agent in the criminal division of the Arizona Attorney General's Office, said cases such as the ones involving Common offer special challenges.

Among those: Common keeps his name off company-formation documents; that he is given access to company accounts; that in order to prove fraud, authorities must show that he encouraged his employees to lie to consumers.

Boyd said it is much easier for authorities to go after companies civilly by imposing fines or closing down businesses with deceptive operations. The threshold to make a civil case is much lower than to make a criminal case, he said.

In an October e-mail obtained by The Republic, Common scoffed at out-of-state regulators who issued a cease-and-desist order to Discount Mortgage Relief. He called their case "a big nothing" and compared it with similar efforts by other states.

"They received a consumer complaint and they have a process to follow so that they can say that they have done their job," Common wrote to Muelhaupt, his ex-wife.

In the e-mail, he advised her to deny her ownership in the company and to deny having any records.

Boyd acknowledged that Common's record and actions concern authorities. But he said he could neither confirm nor deny any criminal investigation into Common.

The FBI would not comment on any past or present investigations into Common.

Those who say they have been wronged by Common remain frustrated that law enforcement has taken no further action.

Spurlock, with the loan-modification business, said, "I would love to get this guy off of the street, to stop this from happening to anyone else. ... But he's been able to stick his thumb at law enforcement over and over again. He sticks his thumb at everybody."

Robert Anglen investigates consumer issues for The Arizona Republic and azcentral.com. Contact him at robert.anglen@arizonarepublic.com.

More on this topic

A history of investigations

Lawsuits and enforcement actions by authorities in eight states have named John Common and his companies.

Arizona: In 2010, the attorney general sued Discount Mortgage Relief under the state's Consumer Fraud Act and the court issued an injunction against the company. Authorities settled with owners Bruce Spurlock and Elizabeth Muelhaupt, who paid fines and closed the company. Authorities sought to extend the injunction against Common, saying after Discount Mortgage Relief was shut down he continued selling loan modifications under the name Mortgage Center Relief. The case was closed in December 2010.

Last month, officials with the Industrial Commission of Arizona, which investigates workers' compensation and wage issues, notified Common to contact them about "possible state-issued civil penalties."

Arkansas: In 2010, the state Securities Commission accused Discount Mortgage Relief of operating without a license. Citing a threat to public harm, officials sought a court order to prevent the company from doing business. Officials entered into a consent order with Spurlock, who agreed to refund fees to residents.

Georgia: In 2010, the state Department of Banking and Finance accused Discount Mortgage Relief of operating without a license. Officials obtained an order prohibiting the company from doing business. The case remains open.

Maryland: In 2011, the state Commission of Financial Regulation accused Discount Mortgage Relief of making false and misleading statements to consumers and operating without a license. Officials sought an order prohibiting the company from doing business. The case remains open.

Minnesota: In 2002, the state attorney general sued Warranty USA, alleging fraud and false advertising. Company representatives did not respond to the lawsuit. A judge ordered Warranty USA to pay $101,311 in restitution. The judgment remains open.

New Hampshire: In 2011, the state Banking Department accused Discount Mortgage Relief of unlawfully collecting fees for mortgage modifications it did not provide. A commissioner ordered company owners to stop doing business. In December, the Banking Department fined Common, Spurlock and Muelhaupt $17,500 each and ordered them to pay $1,930 in restitution and $800 in penalties. The case remains open.

Texas: In 2000, the state attorney general sued Warranty USA, alleging the company used deceptive advertising tactics and violated telephone-solicitation laws. The case was settled in 2000 for $100,000. In 2001, the Department of Licensing and Regulation accused Warranty USA of operating without a license and sought a restraining order against the company in 2002. The case was closed after the company filed for bankruptcy.

Washington: In 2010, the state Department of Financial Institutions accused Discount Mortgage Relief of operating without a license. Company owners were ordered to pay $35,000 in fines and $8,500 in restitution. Officials said Spurlock and Muelhaupt cooperated and Common failed to respond. In November, a default judgment was ordered against Common. Officials said he has not responded. The case remains open.