Pa. sues congressman's son, alleging illegal calls

State says Cory Ruppersberger broke Do Not Call, mortgage and other laws

August 13, 2008|By Gadi Dechter | Gadi Dechter,sun Reporter

The Pennsylvania attorney general's office announced yesterday that it has filed a lawsuit against Rep. C.A. Dutch Ruppersberger's son, alleging that he violated the state's Do Not Call law by making more than 500,000 illegal mortgage solicitations by phone between 2005 and 2007.

The lawsuit, filed in late July in Dauphin County Court of Common Pleas, claims that C.A. "Cory" Ruppersberger, 34, working out of an Inner Harbor office, used an Indian call center to contact consumers in 36 Pennsylvania counties. The complaint seeks as much as $500 million in civil penalties for alleged violations of the state's consumer protection laws, telemarketing rules and mortgage banking laws.

"This is the most extensive campaign of telemarketing calls to consumers on the Do Not Call list ever investigated by my office," Attorney General Tom Corbett said in a statement. "They invaded the homes of thousands of Pennsylvania residents with unsolicited and unwanted phone calls, marketing mortgage loans that they were not licensed to sell."

Congressman Ruppersberger, a Baltimore County Democrat, declined to comment yesterday beyond a prepared statement that read: "This is a business matter that my son Cory is working through with his attorney. I have no involvement in his company."

Cory Ruppersberger did not return calls yesterday to his cell phone and office at 100 Harborview Drive. His attorney in Harrisburg, James DeAngelo, declined to comment.

Nils Hagen-Frederiksen, a spokesman for the Pennsylvania attorney general, said authorities did investigate whether the congressman had a financial stake in his son's businesses and found no connection. "We believe that the younger Ruppersberger was the sole proprietor of these businesses," Hagen-Frederiksen said.

As a freshman congressman in 2003, Ruppersberger voted to authorize the Federal Trade Commission to collect fees to establish and enforce the National Do Not Call Registry.

Pennsylvania officials said they began to investigate Cory Ruppersberger after receiving "large volumes of complaints" in 2007 from consumers registered with the state's Do Not Call list, which is supposed to preclude them from receiving telemarketing solicitations.

Once they began investigating, state officials found the case "very disturbing because we're dealing with an extremely large violation of the Do Not Call list," Hagen-Frederiksen said. "The majority of our cases deal with hundreds or thousands of calls."

Cory Ruppersberger's business model, as outlined on his MySpacecom page, was to generate mortgage leads for loan officers by screening prospective customers through telemarketing calls. On the social networking site, Ruppersberger boasts of being able to "contact clients that aren't being reached by other telemarketing lists because of DNC [Do Not Call] scrubbing."

Lawsuit's details

According to the lawsuit, Ruppersberger's company, Direct Leadsource Inc., allegedly began initiating telemarketing calls to prohibited Pennsylvania numbers at least as early as April 2005 and ended up making more than 500,000 phone solicitations, some of them through a call center in Gujarat, India.

In October 2007, Direct Leadsource forfeited its right to operate as a Maryland corporation after failing to file property returns in 2006, according to the Web site of the State Department of Assessments and Taxation.

In addition to calling numbers on the Do Not Call registry, Direct Leadsource is alleged also to have repeatedly called people who asked not to be contacted again, and placed calls after 9 p.m. or before 8 a.m., all of which are violations of Pennsylvania's telemarketing laws.

Ruppersberger's company is alleged to have used the fictitious names Applied Financial and Financial Awards Center to represent itself as a mortgage business, though it is not licensed in the state to conduct mortgage banking business.

Hagen-Frederiksen said Pennsylvania officials have shared information with the Federal Trade Commission, which oversees the national Do Not Call registry established in 2003. "It is my understanding that this particular company is on the Federal Trade Commission list of major violators," Hagen-Frederiksen said. "They should be on the radar."

Request to call

Mitch Katz, a spokesman with the Federal Trade Commission, said the agency does not confirm or deny the existence of open investigations. But he urged consumers whose numbers are among the 157 million on the national list to contact the agency if they have been called by Cory Ruppersberger's firm.

"If any of these entities are violating the federal Do Not Call rule, we want to know about it," Katz said. Since the establishment of the registry, federal officials have settled about 30 cases with violators, collecting more than $16 million in civil penalties and about $8 million in consumer restitution fees.

Sun reporter Matthew Hay Brown contributed to this article.

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