Edwardsville Company Probed: Suit Also Filed in California
By George Pawlaczyk, Belleville News-Democrat, Ill.
Aug. 7–WOOD RIVER — The Illinois Attorney General today began an investigation of a Wood River-based Internet company accused of defrauding investors who paid $500 each to set up a Web site business to sell discount travel packages.
The Illinois investigation is in response to a lawsuit filed Tuesday by the California attorney general’s office, which alleges that YourTravelBiz.com violated business laws and sold worthless business opportunities.
YourTravelBiz.com moved into new headquarters at 1901 Edwardsville Road last year, using a building that housed a former Kmart store. It was renovated for $6 million.
“We are conducting an investigation and have contacted the California attorney general,” said Illinois attorney general spokeswoman Natalie Bauer.
Bauer said she could not estimate the alleged scheme’s impact on Illinois residents because “an investigation is ongoing.”
“Defendants operated an endless pyramid scheme,” according to the California lawsuit, “that relies on untrue and misleading representations and unlawful, unfair and fraudulent business practices that include violations of laws regulating the sale of seller-assisted marketing plans.”
YourTravelBiz.com charges $500 to a potential investor to get a chance to sell discounted travel packages. Additional costs include a $50 a month Internet maintenance plan. Most investors spend at least $1,000, California Attorney General Jerry Brown stated in the lawsuit.
The defendants include company president Scott Tomer of Edwardsville. The company was founded by Scott Tomer and J. Kim Sorenson of Alton, who also is named in the lawsuit.
Attempts to reach company officials at the Wood River headquarters were unsuccessful.
YourTravelBiz.com reportedly grossed $141 million in 2007, nearly doubling the revenue of the previous years.
According to a nine-page civil complaint, “The typical participant made no money on the sale of travel.”
More than 200,000 persons paid the $500 to set up an Internet based travel Web site in 2007 alone, according to the complaint.
Contact reporter George Pawlaczyk at email@example.com or 239-2625.
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