4 men indicted on fraud counts Business seminars, TV ads allegedly bilked 17,000

Federal court

November 04, 1998|By Sean Somerville | Sean Somerville,SUN STAFF

Four men who peddled "inside secrets," produced "home business infomercials" and arranged "elite performer" seminars through a Hagerstown-based company have been indicted on federal charges that they defrauded 17,000 consumers of $20 million.

A federal grand jury in Baltimore indicted the four men last week for mail fraud and wire fraud arising from the operation of Peak Performance Institute and its successor company, Success Achievement Systems, Lynn A. Battaglia, U.S. attorney for Maryland, said in a statement.

Those indicted were John T. Polk, 38; David C. Bowen, 36, and Steven Clements, 45 -- all residents of Texas -- and Matthew F. Foulger, 31, an Arizona resident. None of the four could be reached for comment.

The indictment says the four men used "false and fraudulent pretenses, representations and promises" to defraud consumers who attended the company's seminars between 1991 and 1996. The enterprise left victims in Maryland, Wisconsin, Texas, Pennsylvania, Washington state, Ohio, California, New Hampshire, Illinois, Georgia, Nebraska and Florida.

The indictment alleges that the four men sent misleading direct-mail advertising and aired false infomercials to boost attendance at the free seminars. Seminar "speakers including Polk, Bowen, Clements and Foulger persuaded consumers to buy for $499 to $599 a program entitled 'Inside Secrets to Real Estate and Government Auctions,' " according to Battaglia.

The program purchasers were invited to use "John Polk's money," or "Matthew Foulger's money" for "joint ventures" to buy items at government auctions or real estate. The "Inside Secrets" purchasers also were invited to a follow-up seminar where they were urged to buy a $500 "Elite Performer" program.

The indictment charges that the infomercials failed to disclose that many of the people appearing in them "were friends, relatives, associates or employees" of Polk and Foulger. It also accuses those two of making misleading statements about their personal wealth.

Through the two companies, the four men falsely suggested limited availability to their programs, the indictment charges.

The enterprise was started as a "seminar business" in Hagerstown in February 1991 by Polk, who incorporated it as Peak Performance Institute Inc.

Polk, the chief executive officer, hired Clements, Bowen and Foulger in 1994. Foulger became president of Peak in 1995, with Polk continuing as CEO and owner. Foulger bought Peak in August 1995 and changed the name to Success Achievement Systems, or SAS, in January 1996.

The company no longer exists in any form, a spokesman for the U.S. attorney's office said.

Foulger faces 14 counts of fraud; Bowen, 12 counts; Polk, eight counts and Clements, five counts. If convicted, each man faces a maximum penalty of five years' imprisonment and a fine of $250,000. Clements, Polk and Bowen are scheduled for initial appearances Nov. 13. Foulger is scheduled to appear Nov. 20.

Pub Date: 11/04/98

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