By Matthew Barakat, Business Writer
ALEXANDRIA, Va. (AP) --Two self-proclaimed stock-picking experts who persuaded consumers on late-night infomercials to spend tens of thousands of dollars on software and other products to play the market were convicted of fraud and conspiracy in federal court Thursday.
Linda Woolf, 49, of Sandy, Utah, and David Gengler, 35, of Draper, Utah, passed themselves off as successful stock traders. In reality, Woolf lost money in the market while Gengler at best made a nominal profit, according to tax records.
They sold wares offered by a company called Teach Me to Trade. Sometimes, customers paid as much as $30,000 for the stock-picking system and software.
Although playing the market wasn’t profitable for the pair, they did make millions of dollars in commissions by traveling to hotel seminars across the country and selling Teach Me to Trade products.
Prosecutors said consumers never would have purchased those products if Woolf and Gengler h ad not portrayed themselves as successful investors.
In a monthlong trial in U.S. District Court, defense attorneys acknowledged that Woolf and Gengler occasionally misspoke or embellished in their sales pitches, but said the two were being held to an impossibly high standard, especially because the law distinguishes between fraud and “puffery” or sales talk.
“What has happened here is the government has criminalized the sale of legal products,” Woolf’s lawyer, Mark Schamel, said in a phone interview after the verdicts. “Every person in America involved in sales has to have a serious concern when they get up and go to work.”
Gengler’s lawyer, Christina Sarchio, said the verdict “has a chilling effect on salespeople everywhere” and said Gengler is reviewing all his options to get the conviction overturned.
The jury deliberated for only about three hours before convicting the two on all seven counts – one conspiracy count and three counts each of wire f raud. The government dropped eight other fraud charges midway through the trial.
Sentencing has been set for July 31. U.S. District Judge Anthony Trenga can set aside the verdicts and dismiss the case.
Schamel declined to comment on the pending motions to dismiss or on whether he might appeal.
Gengler and Woolf worked as independent contractors for Teach Me to Trade, which is a division of publicly traded Whitney Information network in Cape Coral, Fla.
It is unclear whether the convictions might result in other charges against Whitney or companies that put on similar seminars. Government agents said during trial that the investigation of Whitney is ongoing.
Assistant U.S. Attorney Derek Andreson said after the verdict that “this is an unregulated nationwide industry that targets unsuspecting members of the community. Its financial impact is devastating and it warrants continued federal prosecution.”
While Whitney has not been charged, the indictment against Woolf and Gengler said that the two relied on Whitney’s “fraudulent marketing efforts” in their scheme to defraud.
Google Opens Its Defense In Antitrust Case Alleging Monopoly Over Online Ad Technology
Google opened its defense against allegations that it holds an illegal monopoly on online advertising technology Friday with witness testimony saying the industry is vastly more complex and competitive than portrayed by the federal government.
"The industry has been exceptionally fluid over the last 18 years," said Scott Sheffer, a vice president for global partnerships at Google, the company's first witness at its antitrust trial in federal court in Alexandria.
The Justice Department and a coalition of states contend that Google built and maintained an illegal monopoly over the technology that facilitates the buying and selling of online ads seen by consumers.
Google counters that the government's case improperly focuses on a narrow type of online ads โ essentially the rectangular ones that appear on the top and on the right-hand side of a webpage. In its opening statement, Google's lawyers said the Supreme Court has warned judges against taking action when dealing with rapidly emerging technology like what Sheffer described because of the risk of error or unintended consequences.
Google says defining the market so narrowly ignores the competition it faces from social media companies, Amazon, streaming TV providers and others who offer advertisers the means to reach online consumers.
Justice Department lawyers called witnesses to testify for two weeks before resting their case Friday afternoon, detailing the ways that automated ad exchanges conduct auctions in a matter of milliseconds to determine which ads are placed in front of which consumers and how much they cost.
The department contends the auctions are finessed in subtle ways that benefit Google to the exclusion of would-be competitors and in ways that prevent... Read More