Mendham man pays $130,000 penalty over 'work-at-home' scheme

By Ed Beeson/The Star-Ledger
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on October 07, 2013 at 1:59 PM, updated October 07, 2013 at 2:26 PM

A Mendham man whom state authorities have accused of running a “work-at-home” scam has agreed to pay $130,000 and be barred from running similar programs under a settlement reached with New Jersey’s Office of Attorney General.

David Brookman and his company, Capital Enterprises, allegedly lured thousands of people with ads that promised customers could earn as much as $5,000 or more each week by mailing circulars in postage-paid envelopes provided by his company, the state said today. The ads, which hyped the business with phrases such as “Don’t Get Left Out!”, promised users would be sent checks within 10 days of trying out the envelope-stuffing program.

In reality, few people actually made money off of Brookman’s scheme, authorities said. Of the 13,000 people who signed up, only 45 made more than $100 off of it. The most anyone ever made was $520 over a 10-month period, the Attorney General’s office said, citing Brookman’s own records. These payments appeared to be tied to the number of responses users received from their mailers.

To participate in Brookman’s program, customers had to pay a registration fee, the state said. Once they did, they often found the terms and agreements of the program were changed, and often they had to make further payments to Brookman.

“Schemes like these prey on economically stressed consumers who are lured by the promise that they can make good money by working at home,” Eric Kanefsky, director of the state Division of Consumer Affairs, said in a statement. “Unfortunately, it is often those who can least afford to get ripped off, that are themselves victimized.”

The state accused Brookman and his company of violating the New Jersey's Consumer Fraud Act by using “unconscionable commercial practices, deception, false promises” to sell his business. He also used aliases including Maxwell Scott Enterprises, David Gates Enterprises, Warner Daniel, and Preston Lord Enterprises.

The settlement, which Brookman signed without admitting or denying wrongdoing, did not say how much money he and his company made from the envelope-stuffing program. He agreed to pay an initial $50,000 toward his fine, plus quarterly installments of $10,000.

In addition to being banned from advertising or selling work-from-home or direct mail businesses in New Jersey, Brookman also was ordered to not form any business in the state over the next 10 years without first putting up a $250,000 bond.

An attorney for Brookman, Jason LeBoeuf, did not immediately return a message.

Mendham man pays $130,000 penalty over 'work-at-home' scheme | NJ.com

and Mendham isn't that far from Basking Ridge btw.