Zurixx, LLC

Agency: Federal Trade Commission (FTC)Washington
Description:

On February 16, 2022 the Federal Trade Commission and the Utah Department of Commerce Division of Consumer Protection (UDCP) and Zurixx, LLC entered a “Stipulated Order for Permanent Injunction and Monetary Judgment”  to settle a lawsuit filed previously against the company for operating a fraudulent real estate investment scheme. Zurixx faces permanent bans and will pay approximately $12 million for consumer redress as part of a settlement.

The complaints filed by the FTC and UDCP allege Zurixx, its owners, and a number of associated companies operated a real estate investment coaching scheme that sold live seminars and telephone coaching using false earnings claims that convinced tens of thousands of consumers to pay them thousands or tens of thousands of dollars.

Zurixx bolstered sales by partnering with home-improvement and flipping television celebrities. The complaint alleges Zurixx used hard-sell telemarketing tactics promoting the idea that consumers could make tens or hundreds of thousands of dollars in a relatively short amount of time by “flipping” or wholesaling real estate using Zurixx’s system.

Zurixx and its celebrities invited consumers to free “seminars” that, the FTC and UDCP allege, were in fact high-pressure sales events for paid seminars that cost $1,997. Zurixx them pushed more expensive seminars and coaching that could cost tens of thousands of dollars. According to the complaint presenters at the seminars encouraged consumers to open new credit cards to pay for the training, promising that the profits from flipping or wholesaling homes would quickly pay off the new debt.

The complaint also alleged that Zurixx required consumers who received refunds to sign agreements barring them from speaking with the FTC, state attorneys general, and other regulators; submitting complaints other entities; or posting negative reviews about Zurixx.

Under the terms of the settlement, Zurixx are permanently banned from marketing or selling any real estate or business coaching programs. They are also barred from further violations of the FTC’s Telemarketing Sales Rule and Utah’s Business Opportunity Disclosure and Telephone Fraud Prevention Acts. In addition, they are barred from making misleading earnings claims and from using contract terms to restrict consumers’ ability to review their products or speak to law enforcement agencies.

The settlement includes monetary judgments totaling more than $111 million comprised of:

• 
  $104.7 million against the corporate defendants in the case (Zurixx, LLC; Brand Management Holdings, LLC; CJ Seminar Holdings, LLC; Dorado Marketing and Management, LLC; Zurixx Financial, LLCUtah; and Zurixx Financial, LLC-Puerto Rico). These corporations are now defunct and under receivership with remaining assets totaling approximately $5 million, which will be used for partial satisfaction of the judgment against them.


• 
  $2.33 million against Cristopher Cannon and entities associated with him (CAC Investment Ventures, LLCUtah, and CAC Investment Ventures, LLC-Puerto Rico).


• 
  $2.33 million against James M. Carlson and entities associated with him (Carlson Development Group, LLCUtah, and Carlson Development Group, LLC-Puerto Rico).


• 
  $2.33 million against Jeffery D. Spangler and entities associated with him (JSS Investment Ventures, LLC and the JSS Trust).

Details of the case can be found on the FTC website: https://www.ftc.gov/legal-library/browse/cases-proceedings/182-3063-x190047-zurixx-llc.