November 30, 2005
A West Virginia court has barred Coupon Connection of America from doing business in the state. The court acted on a request by state Attorney General Darrell McGraw, who charged the Texas company with engaging in unfair and deceptive business practices.
McGraw charged Coupon Connection advertised a "business opportunity" under the guise of selling grocery coupons. In reality, he says, its program was a pyramid scheme used to bilk consumers out of large sums of money in a short period of time.
"In doing so, Coupon Connection of America, Inc. used a variety of misrepresentations and high pressure sales tactics. Most notably, it promised to make those who followed the program rich, and it tremendously over inflated the demand for purchasing its coupon books and 'money making' kits. Thus, consumers paid outrageous prices for substantial amounts of worthless inventory," he said.
At a hearing on McGraw's motion for an injunction against the company, the State presented four witnesses, three of whom were defrauded by Coupon Connection of America. The fourth witness was Bud Miller, a coupon fraud expert and Executive Director of the Coupon Information Center.
In addition to barring the bankrupt company from doing business in the state, the West Virginia court also ruled that the state's lawsuit may proceed against the Coupon Connection of America, Inc. principals, Donald Farmer and Jerry Rodriguez. Moreover, the order denied defendant Donald Farmer's Motion to Dismiss for lack of personal jurisdiction.
At the time of the hearing, McGraw said he knew of three West Virginia consumers who were defrauded of more than $100,000. The Attorney General says he has since learned of at least eleven more victims throughout the State. Additionally, the Attorney General has recently learned that Donald Farmer has substantial assets, including a home listed with a Texas real estate agency for $4,995,000.
"My office wants out-of-state companies to fully understand that West Virginia courts will not tolerate them using fraud to prey on West Virginia residents," McGraw said. "Our courts will also not allow out-of-state defendants to hide behind the shield of corporate bankruptcy."
A year ago the state of Iowa took similar action against the company.
