Complaint Review: Freedom Resource - Woodstock Georgia

From a local newspaper. Read carefully and you'll see 'Lenox Capital' rear it's ugly little head.... "WebSmart client under investigation Georgia-based company investigated for alleged telemarketing scam By: Tom Rafferty Editorial Staff Writer Posted at - The business that WebSmart Interactive Inc. blames for its recent demise is currently under investigation by Georgia officials. Global Financial, a Georgia-based company, is being investigated for allegedly bilking consumers out of possibly millions of dollars in a telemarketing scam that involved the sale of prepaid credit cards, according to John Smith, director of the Governor's Office of Consumer Affairs in Atlanta. He said WebSmart is not named in the investigation, but some of the calls WebSmart employees made were to sell products that were offered by Global Financial. Smith said authorities in Georgia executed a search warrant on April 17 and seized computer equipment and files from two locations operated by Global Financial in Gwinnett County, Georgia. "We took anything in the two locations that we found that pertained to the allegations," Smith said. No charges have been filed in connection with investigation into Global Financial and no one has been arrested, according to Smith. Smith said Global Financial was allegedly charging people $220 to $230 to obtain a credit card with a $2,500 limit. The credit cards were sold to people who have bad credit as a way for them to rebuild their credit rating. Smith said he is not aware that anyone actually received the credit cards and that's why the investigation was ordered. WebSmart's principal owners, John Skowronek, Bob Lamont and Buzz Stitzer, all Minot residents, closed call centers in Minot, Grand Forks and Saskatoon, Sask., on Thursday, leaving about 620 employees jobless without notice. A Web site set up by WebSmart, (www.websmartinteractive.com), said the company was counting on two regularly scheduled wire transfers of nearly $400,000 between April 21 and April 28. Skowronek did not release the name of company that owes WebSmart money until Tuesday in a fax he sent to the Minot Daily News. Lamont, who was contacted by the Minot Daily News on Tuesday, said if WebSmart would have received the money owed by Global Financial, they might not have had to close the doors on their employees. "We had no idea the Georgia company wasn't going to pay us," Lamont said. "The centers would have still been open if we would have been paid." When WebSmart initially set up business in Minot, the company's work included third-party verification for companies selling long-distance telephone service. Lamont said WebSmart lost business doing third-party verification because long-distance telephone companies quit using call centers to sell long-distance services. "It's been tough to find customers," Lamont said. "It's a very competitive business." Lamont said he did not know why the state of Georgia was conducting the investigation on Global Financial. Georgia officials are also investigating a company that goes by the name of Lenox Capital Inc. that they suspect is an offshoot of Global Financial, according to Smith. Smith said investigators have reason to believe Global Financial operated under several names. "We have reason to believe that the principal owners were creating a number of different companies and operating under a similar plan," Smith said. Former WebSmart employees said the work they did for Global Financial was to make cold calls and sell people the prepaid credit cards. One former WebSmart employee, who did not want to be named, said he also made cold calls for a company called Vertex One. The employee said the script for the calls and the products that he sold for Vertex One were identical to calls that were made on behalf of Global Financial. The employee said supervisors told them that Vertex One was a completely different company from Global Financial, but he added that the supervisors were kept in the dark as much as the telemarketers. "I'm starting to think the whole WebSmart thing was all a big joke," the employee said. The employee also said there is a Web site with complaints about Global Financial from several consumers. The Web site, (www.ripoffreport.com), includes several complaints about Global Financial and WebSmart. Smith estimated that Global Financial brought in excess of $1 million a month. It is unclear if all of that money was generated from Global Financial's sale of prepaid credit cards. "We thought there was a whole lot of money going through the accounts, but when we found out how much is was, it was a whole lot more than we had thought," Smith said. Smith said one of the locations authorities searched in Georgia was located in the back of a check cashing company. "In the back of a check cashing business we found a telemarketing boiler room," Smith said. Smith said although two of the operations have been shut down in Georgia, he said there could be more. An official from the North Dakota Attorney General's office said no complaints have been received against Global Financial or WebSmart in North Dakota, but a form was mailed to someone who wanted to file a complaint about Global Financial. As of Tuesday afternoon, the prospect of former WebSmart employees receiving their final paychecks was still uncertain. Skowronek said in a written statement he has no idea when or if former WebSmart employees will be paid. "If and when we will be able to pay our employees for work performed will depend solely on how quickly we can collect on our receivables," Skowronek said. WebSmart is also seeking buyers for any of the three call centers. Lamont said there are some people interested in the call centers, but so far there have not been any takers. In the statement Skowronek faxed to the Minot Daily News, he said it was unclear what caused Global Financial to default on the debt owed to WebSmart. Skowronek also said he was unclear of what the investigation in Georgia was about. Skowronek, who did not return phone calls placed to his office by the Minot Daily News, said in the statement he is frustrated with having to shut the business down. Skowronek said he and the other principal owners stand to lose a significant amount of their personal savings. He said, however, he will start over some day. "I am a resilient person," Skowronek wrote. "And I will work hard to do my best to get this resolved for the maximum benefit of my employees and creditors. And when I am done with that I will start over. My biggest concern is that it will likely be easier for me to start over than it will be for these communities to replace the loss of these valuable jobs." Skowronek said Thursday that WebSmart owes employees two weeks worth of pay that totals about $338,000. That includes the Metro Center and North Hill centers in Minot, a center in Saskatoon and one in Grand Forks. Another former WebSmart employee, who also asked to remain anonymous, said WebSmart actually owes her one month of pay because WebSmart was two weeks behind in its payroll. The employee also said the feelings among her and other former WebSmart employees is that they will never get paid. "We are never, ever going to see that money," she said. "We worked for nothing and they knew what was going on." Stitzer has also failed to return calls to the Minot Daily News the past two days. However, his wife, Barbara, said WebSmart was not aware of any alleged criminal activity by any of the companies they provided services for. Barbara Stitzer said WebSmart's owners also have a lot of questions they want answered from Global Financial. "We'd like to talk to Global Financial, too," Barbara Stitzer said. The Minot Daily News placed calls to three different numbers to reach Global Financial representatives. One of the numbers was disconnected and there was no answer at two of the numbers.