The Federal Trade Commission has charged two companies and two individuals with allegedly making false representations in connection with a business program that claims to teach consumers how to make large amounts of money by buying and selling privately held mortgage notes. Privately held mortgage notes are notes held by individuals rather than financial institutions.

The federal agency alleges the business practices violate the FTC Act and the Telemarketing Sales Rule and is seeking an injunction, as well as consumer redress.

The FTC’s complaint was filed in the U.S. District Court, Western District of Washington, in Seattle. It names John Stefanchik, Seattle-based Beringer Corp., Scott Christensen and Salt Lake City-based Atlas Marketing, collectively doing business as the Stefanchik Organization.

According to the complaint, defendants charge consumers as much as $5,000 to $8,000 for “The Stefanchik Program,” which purports to teach consumers how to make large amounts of money quickly by buying and selling privately-held mortgage notes, which defendants commonly refer to as mortgage “paper.” The defendants advertise the program, which includes course materials, in-person seminars, videotapes, audiotapes and other educational products and services, through direct mail, telemarketers and on the Internet.

Defendants claim that consumers can “quickly” earn $10,000 a month in their spare time if they follow The Stefanchik Program for buying and selling mortgage paper, according to the FTC. In addition, defendants offer to provide consumers with the services of a personal coach, who is experienced in mortgage paper transactions and is readily available to help consumers find and complete their own paper transactions.

According to the FTC, “virtually no consumers have made any money using the Stefanchik Program, and the personal coaches do not have the promised experience and often are not readily available to consumers.”

The FTC’s complaint alleges that, in their direct mail and telemarketing sales pitches, and on their Internet Web site, the defendants make claims such as:

“The easiest way to make $10,000.00 +++ every 30 days…guaranteed!”

“That’s right! You’ll have $10,000 profit every 30 days easily…from the comfort of your home…in your spare time…with no money to start…no selling…just like myself and people like you are doing right now!”

The complaint further alleges that the defendants did not possess and rely upon a reasonable basis that substantiated the earnings representations that they made to consumers.


Send tips or a Letter to the Editor to or call (510) 658-9252, ext. 133.

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