WISCONSINREPORT.COM (03/26/2009) - The Wisconsin Department of Justice has obtained a 5.5 Million Dollar judgment against a Colorado corporation, the National Rebate Fund, Inc., and its owner, Timothy Stubbs, over their operation of a fraudulent rebate scheme known as the National Energy Rebate Fund. And, in a contamination case, Northern States Power has been ordered to pay 1.3 Million.
The Rebate judgment, granted yesterday by Dane County Circuit Court Judge Steven Ebert, resolves the lawsuit the state filed in 2007 against Kool View Co., Inc., of McFarland, Wisconsin, and its owner, Alan Anderson; and the National Rebate Fund, Inc. (NRF) and its owner, Timothy Stubbs, along with two other employees all of Grand Junction, Colorado.
"Wisconsin does not tolerate efforts to deceive consumers in our state, and the state will respond vigorously. The fraudulent misrepresentations made by the National Rebate Fund and Mr. Stubbs to enrich themselves are deplorable – and unlawful," Attorney General Van Hollen said.
Approximately 320 Wisconsin households received rebate vouchers worth a total of $3.8 million, but only approximately $309,000 was set aside to fund the rebates. Nationwide, NRF issued approximately $60 million in rebate vouchers.
The state's lawsuit alleged, among other things, that the defendants deceived consumers into purchasing replacement windows and other products offered by Kool View by misrepresenting that they could obtain rebates four years later for the amount of their purchase, essentially making the products free, and that the program was limited to participants in an energy field study. In reality, only 8% of the money needed to pay full rebates was set aside, and there was no legitimate energy field study.
Other misrepresentations included statements that the money set aside would earn interest and grow "like a savings bond;" that the funds were under the control of an independent third-party administrator; that if consumers simply remembered to file their claims they would get paid; and that the consumers were paying no more for the goods because of the rebates. All of these representations were false.
Following a hearing today, Judge Ebert granted the state's request that the National Rebate Fund, Inc. and Timothy Stubbs be ordered to pay restitution to Wisconsin consumers in the full amount of the promised rebates $3,868,650. Judge Ebert also imposed a forfeiture of $1 million against NRF and Stubbs and ordered them to pay the state's costs and attorney's fees, which total approximately $119,000. Together with penalty surcharges, the judgment totals $5,508,131.
The court also enjoined the National Rebate Fund and Stubbs from conducting future sales or marketing efforts in Wisconsin, or from withdrawing any funds from the Delaware bank holding the money held in escrow to pay rebate claims.
The Attorney General cautioned that collection of the judgment will be difficult. The National Rebate Fund has ceased operating and Mr. Stubbs has reportedly relocated to Central America. Nonetheless, Attorney General Van Hollen promised that "my office will do its best to enforce the judgment and seize whatever money or property can be located, for the purpose of repaying the defrauded Wisconsin consumers as much as is possible."
The state previously obtained a stipulated judgment of $200,000 against Kool View Co., Inc. and Alan Anderson. The state also obtained a $20,000 judgment against Matthew Stubbs.
The case was investigated and referred to the Department of Justice by the Wisconsin Department of Agriculture, Trade and Consumer Protection. The State is being represented by Assistant Attorneys General John Greene and Lara Sutherlin. The lead investigator was Jeffrey Hole of the Department of Agriculture, Trade and Consumer Protection.
In another matter, the Wisconsin Department of Justice has settled a matter on behalf of the Wisconsin Department of Natural Resources (WDNR) with Northern States Power Company (NSP) doing business as Xcel Energy.
This case was filed in the circuit court of Ashland County in order to recover on behalf of WDN funds WDNR spent in investigating contamination caused by NSP and other potentially responsible parties. NSP owns property on the Lake Superior shore in Ashland that was, at the turn of the century, the site of "coal gasification." The process generated hazardous wastes which seeped into the ground and into Chequamagon Bay, contributing to the contamination.
WDNR investigated the pollution by using funds from its Environmental Repair Fund. State law requires that responsible parties reimburse the WDNR for such expenditures. NSP has agreed to reimburse WDNR $1,300,000. The funds will immediately replenish the Environmental Repair Fund for other environmental remediation projects around the state. NSP has agreed to continue the clean-up plan in cooperation with the United States Environmental Protection Agency.
Assistant Attorneys General Shari Eggleson and Cynthia Hirsch represented the state in this matter. The settlement was approved by Ashland County Circuit Court Judge Robert Eaton.