For more than 20 years, businesses across the country have received letters in the mail asking them to purchase administrative goods and services, such as union posters or company files.
Attorneys general have been targeting shipments for years, raising concerns that they appear to be from the government and that these optional purchases appear mandatory. But the companies that pay for these services are actually sending their money to companies that date back to three Michigan brothers: Joseph, Steven, and Thomas Fata.
So who are these brothers? What makes this business model work? Is this a marketing innovation, or a misleading one as some attorneys general have claimed? Follow MLive to the bottom of it on Mandatory, a new investigative podcast.
The brothers, through their lawyers, declined to comment on this story.
Attorneys General and their consumer protection units have challenged the tactics of the original company, Mandatory Poster Agency, in which the three brothers have been involved at various times, almost since its inception.
According to documents filed by the state, Mandatory Poster Agency was incorporated by Steven Fata in 1999. In 2000, the state sent the company its first cease and desist letter. The business hasn’t stopped or given up, and the state lost a 2015 lawsuit to shut down Mandatory Poster Agency entirely.
Since that initial notice in 2000, businesses run by the brothers have faced more than 30 enforcement actions in 20 states, and a thorn in the side of attorneys general.
Related: MLive Launches Investigative Podcast Tracing Nationwide Business Canvassing Network to Three Michigan Brothers
“This scam – by repeat offenders – has stolen money from the pockets of hard-working small business owners,” Washington State Attorney General Bob Ferguson said in a 2016 press release.
âWhen crooks trick people into paying money they don’t owe, my office will hold them accountable. “
Washington State won the biggest judgment against the company: $ 1.15 million. But not all attorneys general have achieved this kind of result; in some cases, the company made minimal refunds or agreed to small changes in its business practices, or the case was dismissed.
And the idea behind the solicitations has survived – first as Mandatory Poster Agency, and now as LLPS, Inc., with Joseph Fata at its helm, and ANS, Inc., led by Steven Fata.
More recently, the state of Tennessee filed a lawsuit against LLPS, Inc., Council for Corporations, ANS, Inc. and Joseph, Thomas, Steven, Justin and Teresa Fata. The allegations include sending mail that looks like government invoices and demanding large fees for routine things businesses can do on their own for a small fee, or things that are not needed at all.
âThe defendants do not respect the law. They are using a revolving door of new names and new entities to persist in a scheme that is reaping millions of dollars from unsuspecting businesses in Tennessee and others across the country, âsaid Tennessee Attorney General Herbert H. Slatery III in a press release earlier this year.
Click on any of the points below to see what enforcement action has been taken there and read press releases, legal documents or reports on each state’s actions. Dots denote the state from which the execution action originated, not the actual physical location.
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