In the courts: 2005

Court Proceedings, Judgments and
Court Orders - 2005

To protect confidential information, the Bureau does not reveal the names of the companies involved unless they were otherwise made public.

2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000

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Infosearch Publications Inc., and Commercial Media Services

Date of charges: 2005-12-08 and 2006-03-01

Status: In Court, first appearance rescheduled to September 8, 2006.

Court: File #:

Charges laid on December 8th, 2005

73-002513-055
Charalambos and Maria Kokkinasidis (breach of prohibition order).

73-002514-053
6 individuals, and Infosearch Publications Inc.

Charges laid on March 1st, 2006

73-002564-066
Bobby Kokkinasidis, the person.

73-002567-069
9136-0297 Quebec Inc. (dba Corporate Media Services)

73-002565-063
Charalambos Kokkinasidis, sole proprietorship (dba Commercial Media Services)

73-002566-061
9156-6323 Quebec Inc. (dba Commercial Media Services)

Accused Parties - Companies: Infosearch Publications Inc., Charalambos Kokkinasidis, sole proprietorship, 9156-6323 Quebec Inc., 9136-0297 Quebec Inc.

Accused Parties - Individuals: Charalambos (Bobby) Kokkinasidis, Maria Kokkinasidis, Efstathios (Steve) Kokkinasidis, Andersen Ramirez, Heather Romano, Yancy Romano

Provision(s): S.52.(1) of the Competition Act, concerning false or misleading representations, and, s. 52.1 (2)(b) and s. 52.1 (3)(a) of the Competition Act - concerning deceptive telemarketing.

Products or services: Printed business directories, internet directory listings

Summary: On December 12^th, 2005, the Competition Bureau announced that criminal charges had been laid against six persons and one company (Infosearch) allegedly involved in deceptive telemarketing activities in Quebec between April 2002 and April 2004. On March 7^th, 2006, the Bureau announced additional charges laid against one of the same individuals as well as a succession of companies which did businesses first as Corporate Media Services (April 2004 to June 2005) and subsequently as Commercial Media Services (ongoing) Businesses in every province of Canada, numbering in the thousands, were contacted by telemarketers who allegedly led victims to believe that they were simply updating information for an existing supplier of directory advertising services. The telemarketers also allegedly failed to disclose important information, such as the price of the product offered and the terms and conditions of return or cancellation. The businesses subsequently received invoices for goods or services which they either did not knowingly agree to purchase, or would not have otherwise agreed to pay for, had it not been for the allegedly false representations.

News Releases:

December 12, 2005 - Competition Bureau Investigation Leads to Charges Against Business Directory Telemarketers, OTTAWA
http://www.competitionbureau.gc.ca/internet/index.cfm?itemID=2010&lg=e

March 7, 2006 - Telemarketer faces additional charges under the Competition Act, OTTAWA
http://www.competitionbureau.gc.ca/internet/index.cfm?itemID=2036&lg=e

3010619

Yellow Business Pages.com and Yellow Business Directory.com

Date: 2006-06-08 and 2005-11-25
Event: On appeal from the sentence
Court: Court of Appeal for Ontario
Court File Number: C42553 and C42481
Accused - individuals: Alan Benlolo, Elliot Benlolo and Simon Benlolo
Provision(s): 52 (1) of the Competition Act - False or misleading representations
Product: Internet business directory

Summary: Alan Benlolo, Simon Benlolo, and Elliot Benlolo appealed their sentences and fines that were imposed on them for violating the false or misleading representations provisions of the Competition Act (Section 52) for operating a Yellow Pages type scam in 2000. For more court decisions resulting from the trial, please see the listings in: http://www.competitionbureau.gc.ca/internet/index.cfm?itemid=1182&lg=e

Their scam involved sending close to 900,000 mail pieces to businesses and non profit organizations in Canada. These mail pieces falsely appeared to be bills or invoices from Bell Canada or Yellow Pages, when in fact they were solicitations to have the recipients' business details appear in Internet-based directories operating under the names Yellow Business Pages.com and Yellow Business Directory.com.

After being found guilty by a jury on April 23, 2004, Madam Justice Molloy of the Ontario Superior Court sentenced Alan and Elliot Benlolo on October 1, 2004, to three years in federal penitentiary and a $400,000 fine each for their involvement in the scam. Simon Benlolo received a nine-month conditional jail sentence (including three months house arrest) and a $100,000 fine. Another individual who was involved in the scam, Victor Serfaty received a 18-month conditional jail sentence (including six months house arrest), 100 hours of community service and a $15,000 fine, though he did not appeal his sentence or fine.

The Court of Appeal for Ontario heard the appeal filed by Alan, Elliot and Simon Benlolo on November 25, 2005, and handed down its unanimous decision on June 8, 2006. The Court of Appeal dismissed the appeal of the sentences by Alan and Elliot Benlolo, but allowed the appeal of Simon Benlolo, in part, by reducing his fine to $35,000.

Court Documents:

Appeal decision: 108610

Pacific Liberty

Date of charges: 2005-09-22
Status: In Court
Court: Ontario Court of Justice
Accused:  Aleksandr Oks and Oleg Oks
Provision(s) 52.1 (3) of the Competition Act - Deceptive telemarketing; s. 380 (1)(a) of the Criminal Code - Fraud over $5,000
Products or services: Credit Cards

Summary: On September 22, 2005, the Competition Bureau laid charges against Aleksandr Oks and Oleg Oks, directors of a number of Toronto-area corporations, for allegedly victimizing U.S. citizens through various telemarketing scams, namely offering pre-approved credit cards and other promotions. 

The Bureau alleges that the accused preyed on vulnerable Americans with poor credit history by offering them Visa or MasterCard credit cards for an upfront fee of $279 to $319 (U.S.) when they had no affiliation with these companies.  Although victims’ bank accounts were debited, none received a credit card or other promotion.

The accused have been charged with one count each under the Competition Act for deceptive telemarketing practices and one count each under the Criminal Code for defrauding the public of money exceeding $5,000.

News Release:
2005-09-27 - Competition Bureau Participates in Boiler-Rooms Take-Downs

(3099048)

 

Commercial Business Supplies
Date: 2005-09-30
Event: Jail Sentence
Court: Court of Quebec
Court File Number: 500-73-001865-027

Parties: Commercial Business Supplies, Merchant Transaction Supplies, Merchant Supply Services, and International Business Directories, 153595 Canada Inc., 162013 Canada Inc., 162014 Canada Inc., 174440 Canada Inc., M.M. International Business Directories Ltd., and 3350550 Canada Inc. Randolph Misiurak, Stéphane Ouellet, Charles McCulloch, François Lefort, Michael Mouyal.

Provision(s): 52.1 of the Competition Act - Deceptive Telemarketing
Products: Business supplies and business directories
Summary: Not-for-profit organizations, businesses and government agencies in Canada, the United States and the United Kingdom were contacted by telemarketers who claimed to be the regular supplier of office supplies or were renewing a business directory order. The telemarketers failed to disclose material information, such as the terms and conditions of delivery, which included a 20% return fee. Businesses would then receive office supplies or directories that they would not have ordered were it not for these false and misleading representations.

Individuals involved in the scam have already plead guilty and were given sentences: Randolph Misiurak, 40, Montreal, and Stéphane Ouellet, 39, Montreal. Charles McCulloch, 39, Toronto, received a conditional discharge and François Lefort, 37, Montreal, received an unconditional discharge. Justin Pold, 37, of Montreal, who was in charge of the directories scam for International Business Directories, was sentenced to 18 months in prison. Pold also received two years probation, a seven-year prohibition order under section 34(2.2) of the Competition Act as well as an order prohibiting him from participating in any activity involving the sale of office supplies or business directories by telemarketing. Michael Mouyal and the companies await trial, scheduled for November 2006.

News Release
2005-09-30 - Telemarketer sentenced to jail

(108572)

CSCT Inc.

Date of charges: 2005-08-02
Status: In Court
Court: Ontario Court of Justice
Accused: Michael Reynolds and John Armstrong
Provision(s):  s. 52. (1) of the Competition Act - False or misleading in a material respect; s. 380(1)(a) of the Criminal Code - Fraud over $5,000.
Products or services: Electromagnetic Cancer Therapy

Summary: On August 2, 2005, the Competition Bureau laid charges against two individuals - Michael Reynolds of Toronto, Ontario and John Armstrong of Penticton, BC - engaged in making false & misleading cancer therapy claims. The Bureau alleges that the accused preyed upon vulnerable consumers, specifically cancer victims and/or their families, by making unsubstantiated representations on their Web site, at seminars, and in alternative health-care magazine articles and advertisements, direct mailings and telephone communications.

Messrs. Reynolds and Armstrong have been charged with 10 counts each under the Competition Act for knowingly or recklessly making representations to the public that were false or misleading in a material respect and one count each under the Criminal Code of Canada for defrauding the public of money exceeding $5,000.

News Release:
2005-08-02 - Criminal Charges Laid in Cancer Treatment Scam Following Competition Bureau Investigation

(3029123)

Gerald Goldstein, Scarlet Jove, Armenia Linhares, William Kenwood, Sheldon Cutler, Constantina Athanasopoulos, Jerry Browman, Marcus Miller, Michel Rosenberg, Lawrence Walsh and Doron Kunin

Dates: 2005-06-20, 2005-04-01, 2005-03-30, 2005-03-11, 2005-01-13, 2003-01-20, and 2002-10-21
Event: Guilty pleas and Sentences
Court: Quebec Superior Court
Court File Number: 500-73-001731-021
Parties: Gerald Goldstein, Marcus Miller and Sheldon Cutler of Dollard-Des-Ormeaux; Scarlet Jove, Armenia Linhares, and William Kenwood of Laval; Constantina Athanasopoulos of LaSalle; Jerry Browman, Michel Rosengberg, and Doron Kunin of Montreal; and Lawrence Walsh of Côte St-Luc.
Provision(s): 52.1 of the Competition Act – Deceptive telemarketing

Summary: Between October 2002 and June 2005, all eleven accused - Gerald Goldstein, Scarlet Jove, Armenia Linhares, William Kenwood, Sheldon Cutler, Constantina Athanasopoulos, Jerry Browman, Marcus Miller, Michel Rosenberg, Lawrence Walsh and Doron Kunin - plead guilty to deceptive telemarketing under the Competition Act (section 52.1).

Between May 2000 and June 2001, the Competition Bureau and PhoneBusters received numerous complaints that telemarketers were explicitly telling consumers they had won valuable prizes such as a Toyota Corolla or up to $20,000 (U.S.), his and her diamond watches, a washer and dryer set or up to $2,500 (U.S.), a tri-coloured gold genuine sapphire bracelet or a video camera or up to $2,000 (U.S.). However, customers were required to make a purchase of a promotional item, such as a Columbus map, Sirius Flagship, or Napoleon Collectible, in order to receive these prizes. The telemarketers deceived and misled consumers about the quantity and value of these prizes.

News Releases

2005-06-20 - Competition Bureau Investigation into Deceptive Telemarketing Operation Concludes

2005-03-15 - Competition Bureau investigation leads to additional guilty pleas in deceptive telemarketing operation

2003-01-21 - Competition Bureau Investigation Leads to Guilty Pleas by Deceptive Telemarketers

2002-03-18 - Criminal Charges Laid Against Montreal-based Telemarketers

(176865)

Sears Canada Inc.

Date: 2005-04-01
Event: Court Decision/Prohibition Order
Court: Competition Tribunal
Court File No: CT-2002-004
Parties: Sears Canada Inc.
Provisions: 74.01(3) of the Competition Act - Ordinary Price: supplier’s own
Product: All Season Passenger Tires

Summary: On April 1, 2005, Justice Dawson of the Competition Tribunal issued an order against Sears Canada Inc. pursuant to the Competition Act’s deceptive marketing practices provisions. This order follows the Tribunal's January reasons that Sears breached the Act by exaggerating the savings available to consumers when they advertised discounts on certain tires across Canada. In these reasons, the Tribunal also upheld the constitutional validity of the relevant provisions of the Act.

The Tribunal found that Sears had not sold a substantial volume of the tires at the regular price within a reasonable period of time prior to the publishing of the representations, given that Sears had only sold a total of 1.28% at the regular price within the preceding 12 months. In addition, the Tribunal found that Sears had not offered the tires at the regular price in good faith, in that Sears did not truly believe that their regular prices were genuine and bona fide prices, set with the expectation that the market would validate those regular prices.

The Tribunal ordered the following against Sears:

• an administrative penalty in the amount of $100,000;
• costs in the amount of $387,000 inclusive of fees, disbursements and taxes; and
• a prohibition order requiring Sears not to engage in the reviewable conduct or substantially similar conduct, with respect to tires or other automotive related products and services for a period of 10 years from the date of the order.

Court documents
2005-04-01 - Court Decision
2005-01-11 - Reasons for Decision

News Release
2005-04-01 - Sears deceptive tire marketing case

(108569)

Fabutan Sun Tan Studios
Date: 2005-03-31
Event: Application filed
Court: Competition Tribunal
Court File Number: CT 2005-003
Parties: The Dosco Group Inc., Fabutan Corporation, Fabutan Studios, Douglas Scott McNabb, Fabutan Sun Tan Studios
Provision(s): 74.01(1)(a)(b) of the Competition Act - False or misleading representations and representations as to performance without adequate and proper test.
Products: Indoor tanning services

Summary: The Commissioner of Competition has filed an application to the Competition Tribunal for an order requiring Fabutan Sun Tan Studios to refrain from making representations to the public concerning purported health benefits of indoor tanning, including representations indicating or implying that indoor tanning is a treatment for vitamin D deficiency and seasonal affective disorder, stimulates the metabolism, and prevents or reduces the risk of cancer, heart or cardiovascular disease.

News Release
2005-03-31 - Competition Bureau challenges tanning health claims

Court Document
2005-03-31 - Notice of Application (PDF: 732 KB)

(3037974)

JD Marvel Products Inc and CDN MailOrder Exchange

Date of charges: 2005-03-14
Status: In progress
Court: Court of Québec (Criminal Division)
Parties: JD Marvel Prodcts Inc and CDN MailOrder Exchange, John Dragan (President)
Provision(s): s. 52(1)(a) of the Competition Act - misleading representations and deceptive marketing practices
Products: Mail-order sale of various consumer products, including the “Mini Ear”, a device that supposedly improved hearing, and “ClearVue”, a device that supposedly improved television images.

Summary: On March 14, 2005, the Competition Bureau filed criminal charges against JD Marvel Products Inc, CDN MailOrder Exchange Inc (CMOE) and their President, John Dragan, for engaging in deceptive marketing practices. The companies offered a wide range of mail-order consumer products through advertising inserts, coupons in discount envelopes and magazines, catalogues and the Internet.
The Competition Bureau received a total of 5,700 complaints. The Bureau alleges that products were not delivered in the advertised time period of two to five weeks. The Bureau also alleges that consumers were misled about the performance of the “Mini Ear” and “ClearVue” products.

News release
2005-03-14 - Mail order companies charged for deceptive marketing practices

(109675)

NSV Nutrinautes Ltd. (Cocooning Club)
Date: 2005-03-11
Event: Guilty Plea/Prohibition Order
Court: Federal Court of Canada
Court File Number: 550-73-021-023, 200-73-005483-055
Parties: NSV Nutrinautes Ltd., Richard Guertin, Richard Arsenault, Marc Delisle
Provision(s):52(1), 52(5), 55(2), 55(2.1), 55(3), 55.1(2) and 55.1(3) of the Competition Act - Multi-level Marketing and Schemes of Pyramid Selling            & nbsp;            &nb sp;            &nbsp ;             & nbsp;            &nb sp;            &nbsp ;    
Products: Multi-level marketing plan selling Online Software/Diet Plans

Summary: In March 2002, 11 charges were laid against NSV Nutrinautes Ltd., operating as Cocooning Club, under the misleading representation, multi-level marketing and scheme of pyramid selling provisions of the Act. In July 2002, the same 11 charges were laid against each of the the directing minds (Arsenault and Guertin). In November 2002, the company solicitor, Delisle,  was also charged with the same 11 counts.   Following  preliminary hearings in May 2003 and January 2004, all parties were put over for trial.

Following negotiations, NSV Nutrinautes pleaded guilty to four counts under the general misleading representation, multi-level marketing and scheme of pyramid selling provisions of the Act and was fined $75,000.  The vice-president, Richard Arsenault, also pleaded guilty and was given a conditional sentence of two years less a day and a 10-year Prohibition Order. Charges against Marc Delisle were dropped. Charges against the company president, Richard Guertin, remain outstanding.   

News Release
2005-03-11 - Multi-level marketing firm pleads guilty to misleading participants

(108657)

Federal Auction Service and Amir Durrani

Date: 2005-03-10
Event: Consent Agreement
Court: Competition Tribunal
Court File Number: CT-2005-002
Parties: 3283312 Canada Inc o/a Federal Auction Service/Amir Durrani
Provision(s): 74.01(1)(a) of the Competition Act - False or Misleading Representations
Products: Auction services

Summary: In March 2005, the Bureau registered a consent agreement with the Competition Tribunal in which Federal Auction Service and its president, Amir Durrani, agreed not to make representations to the effect that the company had been retained, authorized or instructed to sell items on behalf of the Government unless these representations were accurate. The company agreed to pay an administrative monetary penalty in the amount of $25,000. The consent agreement also required the company to clearly identify the volume and source of each item for sale at its auctions in certain specified circumstances, to publish corrective notices in newspapers and on its Web site, and to implement a formal company compliance program regarding the use of promotions.

Court Documents
Consent Agreement (pdf format)

News Release
2005-03-10 - Competition Bureau reaches settlement with federal auction service in advertising case

(177487)

GoodLife Fitness Clubs Inc.
Date: 2005-02-09
Event: Registration of Consent Agreement
Court: Competition Tribunal
Court File Number: CT-2005-01
Parties: GoodLife Fitness Clubs Inc.
Provision(s):  S. 74.01(1) of the Competition Act - misrepresentations to the public
Products: Memberships in fitness clubs

Summary: GoodLife Fitness Clubs has conducted various advertising campaigns which the Competition Bureau maintains misrepresented the costs of membership in their clubs. These ads, with phrases such as “6 months for free”, did not mention additional fees. As a result, consumers were misled as to the true nature of the costs involved in a membership.

Subsequent to the Bureau's investigation,  the company has changed its advertising.  A Consent Agreement was registered with the Competition Tribunal, which is binding for 10 years. The company agreed to ensure all its advertising and other representations to the public would adequately disclose all additional fees payable in order to obtain a membership, and would otherwise conform to s.52 and s.74.01 of the Competition Act. In addition, Goodlife agreed to establish and maintain a corporate compliance program; to publish corrective notices in various publications in their market areas; and, to pay an administrative monetary penalty of $75,000.

Court Documents
2005-02-09 - Consent Agreement
PDF Format (329KB)

(3028130)