Club scam update: despite recent arrests of golf-club telemarketers, consumers should still be wary

Golf Digest, Nov, 2002 by Mike Stachura

WHEN HE HEARD NINE MEN IN CALIFORNIA had been indicted for wire fraud in a golf-equipment telemarketing scheme, Jim Ankenbauer laughed out loud.

"That's good to hear," says Ankenbauer, who was in the hole for $1,400 until his credit-card company stepped in. "They were terrible. They humiliated people who were just trying to get their money back. They can throw them under the jail and throw away the key, as far as I'm concerned."

Ankenbauer says he was one of thousands of consumers who were bilked out of so-called "security deposits" of several hundred to more than a thousand dollars each after agreeing to test-play new golf clubs. As Golf Digest reported in January, the con works like this: You get an offer to "play test" a new line of clubs--no obligation. You give a credit-card number as "security" for the clubs that are to be sent to you. You return the clubs within the required period but discover your credit card has been charged. If you've kept the clubs for the 60-day trial usually mandated by the agreement, most credit-card companies tell you it's too late to dispute the charges. Faced with an uncooperative equipment company, you're stuck.

The nationwide golf telemarketing scheme has been under investigation by several government agencies and the Better Business Bureau for more than three years, and in the past year authorities have made 11 arrests. One California man, Mitchell Gold, was sentenced in July to more than eight years in prison for his role in various types of telemarketing fraud, including a golf test-play program from a company called Platinum Pro Tour.

The latest case is against nine men associated with Professional Golf Products (PGP), the California company that Ankenbauer says took his money. It is the first time anyone has been indicted solely for their role in a golf-club telemarketing scheme. According to the indictment, among the nine arrested in August by agents and officers with the Federal Bureau of Investigation, the Orange County (Calif.) Sheriff's Department and the United States Postal Inspection Service were PGP owners Warren Joseph Crawford and John Tepel, as well as Glen Totten, who managed boiler-room operations in two California locations. The indictment accuses the men of deliberately misrepresenting their product and the company, obstructing consumers' ability to return golf clubs for a refund and using customers' security deposits "to enrich themselves and to further promote the test-play scheme." According to the indictment, PGP generated sales "in excess of $5.8 million."

The nine men are charged in all 20 counts of the indictment, and each count carries a maximum penalty of 10 years in prison, according to Assistant U.S. Attorney Ken Julian. Even more important for consumers, prosecutors will seek restitution from the personal assets of all those charged.

"Whether they have the resources to be able to do that is another question," Julian says. "In addition to imprisonment, that's a very important element of the sentence. And that amount of money is a very conservative estimate."

The Better Business Bureau is still taking complaints from consumers who say they have been affected by club test-play schemes involving PGP and others. If you think you have been taken advantage of by a golf club test-play telemarketer, you should contact your local Better Business Bureau chapter (www.bbb.org) or the nearest FBI field office (www.fbi.gov).

"They should file complaints, because sometimes there is money returned," says Kim Burge, director of trade practices for the BBB of the Southland in California. "We want people to be aware of it when and if there is restitution."

Julian says his office is seeking to find more golf club test-play scams. "We see this as a beginning, not the end," he says. "There are other companies on the radar, and it's a matter of time before we indict them as well."

Back in January we told you about club-test telemarketing schemes, and this month Equipment Editor Mike Stachura follows through with the news that nine men have been indicted for wire fraud. Help may be available for those who believe they have been scammed. See page 90.