January 28, 2014

Work-at-home deal puts widow in debt

Work-at-home scams often appear obvious. Right up there with the Nigerian letter. People often say, “Who would fall for that?”

The victims are surprisingly ordinary. Many are retired or jobless, looking for an opportunity and willing to take a chance.

Want to see the face of a victim? Dianne Cavaness is a 66-year-old widow who sunk $27,000 into an Arizona company that authorities say preyed on people around country with promises of instant income from a Web-based business.

Cavaness, a former home-health nurse who retired from the Fremont County Department of Family Services in Wyoming, still was grieving over the death of her husband when she answered a call from E-Biz-Services, LLC.

The representative named Mike was friendly and cordial, she said. He talked about running a business from her living room. She thought it might be a way to take her mind off her husband’s death. All she needed was a computer and a small amount of startup capital.

Cavaness said she wasn’t hooked on the first call, more like intrigued. She looked up the company on the Internet, asked for a prospectus describing the operation, requested some time to think. The company sent her a brochure and followed up with calls. No pressure, just making sure she didn’t have questions.

The business model sounded reasonable. She would be part of a credit-card-processing company. E-Biz had relations with merchants and she said she would receive a commission each time somebody slid their card through a designated processing machine. The company established a Web page where she would be able to track her income and the number of people using her processing device.

Her page was called Riverton Merchant Services.

“After losing my husband, I wanted to start an online business, make some money working from home,” Cavaness said. “I had a website, they called it my back office.”

She said E-biz representatives asked her to establish credit cards of her own where they could bill business expenses. She said she authorized charges that were not supposed to exceed a few hundred dollars.

Cavaness said her first inkling of trouble came when her weekly commission checks never arrived. She said the representatives who at first were so helpful wouldn’t give her an answer. Then she discovered three of her credit cards had been charged to their limit of $27,000.

“It’s my own stupid fault,” she said in an interview last week. “I should have an S stamped on my forehead.”

What Cavaness did not know is that E-Biz was just one of a number of companies operated out of a Phoenix mailbox drop near Central Avenue and Camelback Road.

Records show its operator, Scott Shocklee of Phoenix, has a history of civil liens and judgments and a criminal record for trafficking in stolen property, drugs, domestic violence and theft.

Shocklee, 36, on Friday said he had nothing to say about the company. He then said Arizona authorities put out a lot of misinformation about his company and his conduct.

“Yeah, I have an attorney and I’m gonna have him put out a press release,” Shocklee said in a brief phone interview. “Most of the stuff said was wrong.”

Asked about Cavaness and other people who lost money on his business, Shocklee said the claims “are just allegations.” He said the company operated ethically.

“We did everything we were supposed to do,” he said. “They are making it so we are guilty until we prove that we are innocent.”

Shocklee would not discuss his convictions or past lawsuits filed against him, saying that was his “private business.”

Shocklee is one of several individuals named in a recent suit by filed by the Arizona Attorney General’s Office against a network of telemarketing companies.

The companies named are: JST Merchant Services LLC, JSTEBIZSERVICES LLC, J and S Productions LLC, Top Choice Merchants LLC, BBS Merchant Group LLC, E-Biz-Services LLC, North Star Billing LLC, United Billing Services LLC and United Online Merchants LLC.

Individuals named in the suit are Jeffrey Alan Hankins, Thomas C. Mikla, Vyacheslav “Steve” Yagudayev, Veronica Cabrales and Brooke Marcus.

Marcus, in a telephone interview Friday, said she was “just a manager” of one of the companies. She described herself as a recovering drug addict. She indicated that she didn’t think it was fair to include her name in stories about the telemarketing companies.

The attorney general’s lawsuit accuses Shocklee, Marcus and other operators of violating “the Arizona Consumer Fraud Act, the Arizona Telephone Solicitations statute and the Arizona Organized Crime, Fraud and Terrorism Act (racketeering).”

The suit alleges operators defrauded consumers out of millions of dollars by selling them programs they claimed would earn lucrative returns. Telemarketers falsely claimed they would advertise credit-card-processing services via the Web that would generate commissions for the consumer, according to the lawsuit.

A Maricopa County Superior Court judge has frozen the defendants’ personal and business assets and is prohibiting them from doing business while the case is ongoing.

Cavaness, meanwhile, is trying to pick up the pieces. She had to enroll with a financial-service company to help pay the credit-card debts. She lives on a fixed retirement income and said she will continue struggling to pay her bills.

She said she isn’t looking for sympathy but hopes her story will make others realize it can happen to anybody.

“I got myself into this pickle,” she said.