New York: Spitzer Cracks Down on ETS Payphone Scam

ConsumerAffairs.com reports:

“Victims were told that they could buy the phones, lease them back to ETS to operate, and receive a “guaranteed” 14 percent return on their investment. Furthermore, the investors were told that they could sell the phones back to the ETS for the original purchase price at any time after six months. Typically, investors were persuaded by the brokers to liquidate conservative investments, such as retirement annuities, to fund their purchases.
“A federal investigation revealed the scheme to be a Ponzi scheme in which investors’ monthly checks from ETS were coming out of new investors’ principal payments and not ETS’ profits.”

Read more at ConsumerAffairs.com.