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February 11, 2020

Judge orders Quad Cities telemarketing operation to pay $2.6 million

Miller’s office wins permanent injunction against Barnum’s companies 

DES MOINES — A Polk County judge has ordered a Quad Cities-based telemarketing operation to pay nearly $2.6 million and permanently banned it from doing business after finding the operation had defrauded small businesses across the nation. 

Polk County District Judge Heather Lauber granted Iowa Attorney General Tom Miller’s request for summary judgment against owner Alphonso Barnum of Davenport, several of his associates, and 10 companies. 

“We’re pleased that the judge found clear and convincing evidence to penalize Barnum and his partners,” Miller said. “He refused to respond to our requests at every turn, but our Consumer Protection Division persisted in bringing the defendants to justice.”  

In December 2018, Miller sued Barnum and the others, alleging the defendants violated the Iowa Consumer Fraud Act by using deception, confusion and high-pressure tactics purportedly to sell advertisements for direct-mail pieces and promotional items, such as high school sports posters and city information guides.  

Judge Lauber found that in many cases, the companies delivered no products. Barnum's agents also called businesses and falsely told consumers that they had previously agreed to purchase advertising and that their accounts would be sent to a collection agency unless the consumers paid that day. The consumers would give the defendants credit card or bank account numbers as a result. 

Defendants then made unauthorized charges against the victims’ accounts, including creating checks that were run through victims' bank accounts, the judge found. Between January 2016 and January 2019, the defendants’ bank accounts received more than $1.94 million in deposits taken from consumers, according to the ruling.  

“Even after the state initiated this lawsuit, the defendants continued to engage in unlawful practices,” Lauber wrote. 

The defendants also falsely represented to consumers that they were a Christian or faith-based operation, the judge found.   

The injunction and judgment of $2,581,055.41 were entered against defendants Barnum; his wife, Lafayia Kay Barnum; his mother, Willie C. Nance; employees Kelsey J. Patterson and Henry Alexander Clark; and the following companies: CW Promotions LLC; Top Faith Solutions LLC; City Wide Promotions LLC; New Start Media LLC; TFS LLC; Alumni Sports LLC; New Start Marketing; Xpreshion Multimedia; Xpreshion Multimedia LLC; and Greater Solutions LLC. 

In all, Judge Lauber found 16 violations of the Consumer Fraud Act, and imposed the maximum amount allowed for each violation, for a total of $640,000 in civil penalties. 

The order includes $203,184 in restitution to seven consumers in Iowa, Illinois, Wisconsin, Texas, Idaho and Michigan who testified that they had been lost money through actions by Barnum and the companies. 

Lauber also ordered disgorgement in the amount of $1,737,151.41. Iowa law allows disgorgement when the state shows the defendants made illicit profits.  

The judge also awarded attorneys fees and costs to the state, which will be determined at a later date.  

The permanent injunction prevents the defendants from conducting any business or activity involving telemarketing or the sale of advertising or promotional items. 

The injunction applies to all “persons, corporations and business entities acting in concert or participating with the defendants,” including Paul Barnes, Misty Barnes, Destiney Hurstrom, Latosha Morrison, Joe Lewis, and Joswa Lewis. 

Another Polk County judge issued a temporary injunction in July 2019 to halt Barnum’s operations

Miller reminds consumers to never give bank account information or credit card numbers to telemarketers or others over the phone. Consumers should also do their homework: A Google search shows that consumers around the country have complained about some of the entities owned by Barnum, and New Start Media has an “F” rating from the Better Business Bureau

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