"You'll Get the Grant!" Two Vegas Telemarketers Plead Guilty in a $14 Million Small Business Scheme

So when somebody targets them with fake grant promises? That one's personal.

What happened?

On May 1, 2018, the U.S. Attorney's Office for the District of Nevada, part of the Department of Justice (DOJ), announced that Mark L. Bausch, also known as Mark Eting, 43, and Alan W. Rodrigues, 59, both of Las Vegas, pleaded guilty in a $14 million telemarketing fraud scheme targeting small business owners.

Each pleaded guilty to conspiracy to commit wire fraud, wire fraud and money laundering. U.S. District Judge Kent J. Dawson accepted the pleas and set sentencing for August 14, 2018.

How the scheme worked

According to the plea agreements, from March 2009 to about October 2010:

• Bausch, Rodrigues and others ran four telemarketing companies: Small Business Funding Co., Inc., Company Funds, Inc., Foundation Research, Inc. and Silver State Holding Company.
• They charged a fee to help small business owners get grants from public and private sources.
• They made false statements so it looked like victims were likely or guaranteed to get a grant.
• They hired salespeople and had them give customers false information.
• To look legit, employees researched funders and sent letters, even though many customers wouldn't qualify.
• They also held seminars around the country.
• When complaints poured in, they made false statements to stall people from going to law enforcement.

The numbers

As part of the plea agreements, each defendant agreed to pay $13,966,329.30 in restitution and a criminal forfeiture money judgment between $631,142 and $1,050,955.

They were indicted with co-defendants in December 2014. Several had already been sentenced, including Craig Rudolph (77 months), Jonas Bowen (63 months), Lee Panelli (41 months) and David Bergstrom (51 months).

The Federal Bureau of Investigation (FBI) and IRS Criminal Investigation (IRS-CI) investigated.

Here's the thing ...

"Guaranteed." That one word gets so many people in trouble.

Nobody can guarantee a grant. Nobody can guarantee funding. And when your sales team says it anyway, and management tells them to? That's not a sales culture. That's a conspiracy.

The other tell? Stalling complaints so people don't call the cops. If your customer service playbook is built to keep people from reporting you, you already know what you are.

What to do this week

• Ban "guaranteed" from your scripts unless it's literally true.
• Disclose eligibility up front. If most people won't qualify, say so.
• Treat complaints as data, not as problems to manage away.
• Remember the TSR. The Telemarketing Sales Rule (TSR) bans misrepresenting what you're selling.

Help small business owners for real. They'll remember you.