This graphic shown above is a Keto Diet scam ad onto which we have shooped the faces of Gary Cardone and Monica Eaton of Chargebacks911. The point of adding Scientologist OT8 Gary Cardone and his non-Scientologist ex-wife to this shoop is to illustrate how a RICO class action lawsuit alleges that Cardone, Eaton, and their company Chargebacks911 aided and abetted Keto Diet scammers online. In doing so, the complaint alleges, Cardone and Eaton became involved in racketeering with their scammer clients.
The basis of the civil RICO allegation is that Cardone and Eaton knew of the “Keto Racket” scheme to defraud consumers; willing participated in the scheme to enrich themselves; and thereby engaged in racketeering along with their clients.
An amended RICO class action lawsuit captioned Sihler, Bavencoff et. al. v. Global E-Trading LLC DBA Chargebacks911, Cardone, and Eaton (Case No.: 8.23-cv-1450-VMC-JSS Middle District of Florida) is posted below.
The plaintiffs allege that Gary Cardone, Monica Eaton, and their company Chargebacks911 played a major role in what is being called the Keto Racket. This scheme was designed by online scammers to offer consumers, for example, two free bottles of a Keto diet pills if they purchased three bottles.
In reality, the scammers shipped three bottles and charged consumers for five bottles. This triggered chargeback claims from consumers and this is where Chargebacks911 is alleged to have come to the defense of the scammer by use of various schemes to deliberately mislead and deceive credit card companies and thereby protect the scammers.
The scheme Chargebacks911 used is the same one the company is accused of using in the lawsuit filed against it by the US Federal Trade Commission and the State of Florida. Readers can review our article on the FTC/Florida lawsuit for specifics of that complaint.
Under US law, the Racketeer Influenced and Corrupt Organizations Act (RICO) requires at least two predicate acts be alleged in order to file under civil RICO. From Justia.com:
Even though RICO threatens very long prison terms for racketeers, the law’s real power is its civil component. Anyone can bring a civil suit if they’ve been injured by a RICO violation, and if they win, receive treble damages. In the 1980s, civil lawyers attempted to fit many different claims inside of RICO, but in the 1990s the federal courts set up a number of hurdles for civil RICO claims. To succeed on a RICO claim, a plaintiff must show:
- Criminal Activity. You must show that the defendant committed one of the enumerated RICO crimes, which include the broad crimes of mail and wire fraud. If you bring a claim on a fraud basis, however, the court will apply strict scrutiny.
- Pattern of Criminal Activity. One crime is not enough. You have to show a pattern of at least two crimes. A pattern requires the crimes be related in some way—same victim, same methods, same participants—or continuous, meaning it was conducted over at least a year.
- Within the Statute of Limitations. The Supreme Court held that RICO has a four-year statute of limitations, which begins tolling from the time the victim discovers his or her damages.
The Sihler lawsuit alleges that Gary Cardone, Monica Eaton and Chargebacks911 committed numerous acts of mail and wire fraud and engaged in a conspiracy to defraud financial institutions as predicate acts:
In the GPB Capital Holdings criminal case we have been covering for several years, and will continue to cover, defendant Jeff Lash recently plead guilty to one count of felony wire fraud.
During his allocution, Lash was advised by the court that the sentencing guidelines for the one count of wire fraud to which he entered a guilty plea set his range of imprisonment at 151 to 188 months.
This screenshot below is shown in the amended Sihler lawsuit and shows one example of the “Keto Racket” internet fraud of which Chargebacks911 is alleged to have aided and abetted. Consumers would purchase three bottles from this web page and expected to receive two free bottles. However, consumers were charged for five bottles of the product.
When these consumers filed a chargeback with their credit card companies, Chargebacks911 allegedly sent the credit card company a representment which is a screenshot of a different webpage showing the consumers agreed to be charged for five bottles. Sending credit card companies false representments is the same deceptive and fraudulent business practice the FTC and Florida are suing Chargebacks911 over.
Gary Cardone’s serious legal problems speaks to the permissive towards white collar criminality that is so prevalent in the Church of Scientology. That non-Scientologist Monica Eaton is alleged to have engaged in these trade practices speaks to the internal culture at Chargebacks911 as she is the CEO.