The Iowa Attorney General’s Office has filed a lawsuit against a Davenport man that alleges that his business promised to create and distribute promotional items — including posters promoting high school sports teams — but instead defrauded small businesses across the country.
The lawsuit, filed Dec. 4 in Polk County District Court, alleges that Alphonso Barnum; his wife, LaFayia Kay Barnum; his mother, Willie Nance, and several limited liability corporations, including City Wide Promotions, Top Faith Solutions, and New Start Media, violated the Iowa Consumer Fraud Act.
The Attorney General’s Office alleges in the lawsuit that the businesses started by selling advertising space on posters and calendars that promote high school sports teams, and then expanded to direct mail advertisements, city information guides, magnets, and brochures.
The advertisements, which range in cost from a few hundred dollars to more than a thousand dollars, are sold to real estate and insurance agents and other small business people.
The Barnums’ companies often promise to make up to 5,000 of the promotional items and distribute them throughout the community, including mailing to all households and sending to supermarkets or other popular locations, according to the suit. They also falsely claim they are working with local schools to distribute the items, according to the suit.
The companies sometimes create mock-up ads or produce a few samples for customers. But often that is the only product that gets made or distributed, the lawsuit alleges. The defendants charge the customers’ credit card or bank account and ignore complaints from customers or delay responding until after the money is gone and the victims cannot get the money back, according to the suit.
When the defendants get too many complaints, they create new LLCs and switch credit card processors and banks, according to the suit.
The lawsuit says the defendants also use confusion and high-pressure sales tactics to convince consumers that they have previously agreed to purchase advertising and that the amounts are past due. They threaten to turn consumers over to a collection agency if they refuse to pay the fictitious debt immediately, according to the suit.
The Attorney General’s investigation and news stories indicate that consumers have complained about the defendants’ practices across the country, including in New York, Idaho, Michigan, Texas, Massachusetts, California, Florida, Georgia, and Missouri, as well as Iowa. New Start Media has an “F” rating from the Better Business Bureau.
According to the suit, filing the lawsuit in Polk County is proper because "defendants did business in Polk County, made advertising sales to residents of Polk County, and one or more consumer victims of defendants' unlawful practices in question reside in Polk County."
The Barnums have refused to respond fully to the Iowa Attorney General’s investigative efforts. “Defendants have exhibited a complete indifference to the investigative efforts of the Iowa Attorney General,” according to the suit.
The suit also states that Alphonso Barnum has a "lengthy" criminal history in Illinois and Iowa for multiple felony and misdemeanor convictions, including deceptive practices, forgery, theft and felon in possession of a firearm.
The Attorney General’s Office is seeking penalties against the defendants for up to $40,000 for each violation, in addition to reimbursing victims for all money wrongfully obtained.
They also are asking a judge to permanently dissolve each of Barnum’s limited liability companies and prohibit the Barnums from operating any business in Iowa involving advertising or selling of promotional items.