Wednesday, April 15, 2009

Tranforming Debt into Theft

The radio ads by John Commuta's "transforming debt into wealth" took on a new dimension when one of the group's credit counselors allegedly stole $100,000 from a former client. We never called or looked into the program but scratch our heads when reading that it takes over $9000 to join the program. We now think we understand how it works for the group - the members get more debt and the organization gets more wealth. In an article from the Boston Herald there is an article titled John Commuta 'debt coach' charged gives us some details on the case. Let's take a look -

A Worcester [MA] woman thought she was “transforming debt into wealth,” as promised on a radio ad for John Cummuta’s get-out-of-debt programs.

What she didn’t count on was going $100,000 into debt to transfer her wealth to an alleged Utah scammer, who Secretary of State William Galvin yesterday accused of defrauding the Worcester woman after the man became her “financial coach.”

Darin Floyd Beal, 31, of Utah, was charged with defrauding the unnamed woman of $100,000 after she responded to a Cummuta radio ad in 2006.

After she paid a $9,270 charge to join a debt-to-wealth program, the woman said Beal was assigned to her as a “financial coach.”

He encouraged her to take out a $100,000 home equity loan and invest in promissory notes, promising her big returns, Galvin’s office said in a complaint.


But then Beal, after leaving Cummuta’s company, recommended she invest another $100,000 in promissory notes, promising her 27 percent returns, Galvin’s office said.

Paying over $9000 to save money should set off the first set of alarm bells. Getting 27% returns should also set off more than just alarms. Those numbers make Madoff look credible. Perhaps that is why the advertisements come over the radio - looking for gullible marks that are looking to get rich for nothing.

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