The federal government has sued a Los Angeles County telemarketing company that officials said had reaped $7 million by making false promises of work-from-home opportunities to female viewers of Spanish-language television stations, exploiting their economic insecurity — and later, their worries over the coronavirus pandemic.
The company, Moda Latina BZ, made false representations in television ads stating that consumers could make up to $500 a week selling perfume, makeup and other merchandise without leaving home, the Federal Trade Commission said in a lawsuit that was unsealed on Tuesday in U.S. District Court in Los Angeles.
The ads typically ran on the Spanish-language networks Telemundo and Univision, during programs including telenovelas, according to the lawsuit, which also named two of the Moda Latina BZ’s executives as defendants. Screen shots of the television ads showed women holding wads of cash.
The commission said that the scheme had begun in March 2017 and had ended in August of this year, five months into a pandemic that has disproportionately affected Hispanic people. In Los Angeles County, where Moda Latina BZ is based, Hispanic residents were more than twice as likely to become infected with the coronavirus than white residents were, according to the latest public health data.
The lawsuit contends that Moda Latina BZ engaged in abusive and telemarketing practices that violated the Telemarketing and Consumer Fraud and Abuse Prevention Act.
“Seizing on economic insecurity in the community,” the lawsuit said, “defendants lure consumers into purchasing work-at-home business opportunities with the false promise that consumers will earn hundreds of dollars per week reselling brand-name perfumes, makeup, jewelry, designer clothing, fashion accessories and other luxury products.
The company did not respond to several requests for comment on Tuesday night, including one that was left with a Los Angeles-area accountant who has done work for Moda Latina, which is based in La Puente, Calif.
Efforts to reach the company’s chief executive officer, Esther Virginia Fernandez Aguirre, and its general manager, Marco Cesar Zarate Quíroz, the two executives named in the lawsuit, were unsuccessful on Tuesday night.
Court filings did not list any lawyers for the company or for the two executives named in the lawsuit.
To get in on the working-from-home arrangement, the commission said, would-be sellers had to pay an enrollment fee of up to $299 that included a start-up kit with perfumes or other goods. The company’s telemarketers told consumers that they would turn a profit of several hundred dollars, but the kits included items that were either counterfeit or cost much more than those sold at department stores, officials said.
The company regularly insisted that consumers provide it with money orders for the enrollment fee when the kits had been delivered and threatened to take legal action or call credit bureaus if they did not comply, according to the lawsuit, which was filed on Nov. 30.
A Federal Trade Commission spokesman declined to comment further on the situation.
In the lawsuit, the commission said that Moda Latina BZ had made $2.6 million from consumers who paid with money orders from July 2018 to August 2020.
Seamus Hughes contributed reporting.