The Iowa Attorney General’s investigation into Quad Cities-based national advertising and telephone scams has led to a civil lawsuit against another telemarketing operation.
Misty and Paul Michael Barnes and their businesses, PM Specialties and Milestone Consulting, are accused of defrauding small business owners in at least 13 states. Attorney General Tom Miller sued the couple and their businesses on Tuesday, alleging fraud, deceptive advertising, unfair practices and other violations of the Iowa Consumer Fraud Act.
The state seeks a temporary and permanent injunction to shut down the businesses and asked a judge to order restitution to consumers who have lost money, as well as civil penalties.
The Barneses, who have lived and conducted operations in Davenport and Bettendorf, formerly worked with Alphonso W. Barnum of Davenport, who was sued by Miller last year for similar practices.
On Feb. 11, a Polk County judge ordered Barnum and his associates to pay nearly $2.6 million and permanently banned them from doing business after finding the operation had defrauded small businesses across the nation. Between January 2016 and January 2019, Barnum and his fellow defendants received more than $1.94 million taken from defrauded customers, according to the ruling.
Lauber’s ruling also named Misty and Paul Barnes and banned them from working with Barnum in any telemarketing or advertising business.
Miller’s office heard from victims of Barnum’s scam that they had also been targeted by PM Specialties. The new lawsuit alleges that beginning in 2018, Paul and Misty Barnes launched PM Specialties and solicited business from then-current and former customers of Barnum as well as Universal AdCom. The Barneses also worked for Universal AdCom, which is an Arlington, Texas, telemarketer with a call center in Davenport. The Better Business Bureau has given Universal AdCom an “F” rating based on consumer complaints.
According to the AG’s lawsuit, the Barneses’ alleged fraud took on many forms, including:
- Calling consumers and falsely saying they had a past-due bill for advertising or internet-related services, which they must pay immediately, even though the consumer had never ordered anything.
- Selling consumers “internet boosting” services, which they promised would result in increased traffic to businesses’ websites. The Barneses, however, did not request or obtain administrative access to the websites. Nevertheless, they told consumers that their websites were now receiving hundreds of thousands of visits.
- Telling consumers who had done business with Universal AdCom in the past that PM Specialties could obtain refunds from Universal AdCom by adding them to a lawsuit against the company. The Barneses also told the consumers that they had an insurance company that could pay the consumer up to $10,000 a month in the future, until they could take Universal AdCom to court, if the consumer paid PM Specialties several thousand dollars up front.
- Making unauthorized credit card charges on consumers’ accounts under the name Milestone Consulting. When customers complained, the Barneses claimed that “Milestone Consulting” was a fictitious name being used by Universal AdCom.
The AG’s office has found consumers targeted by the defendants in Idaho, Illinois, Indiana, Iowa, Minnesota, Nebraska, North Carolina, North Dakota, Ohio, Tennessee, Texas, Utah, and Wisconsin.
One consumer, the owner of a fabric store in Ohio, reported that she lost at least $23,044 to PM Specialties and Milestone Consulting.
Misty Barnes, formerly known as Misty Stein, Misty Tunnell and Misty Delgado, has a lengthy criminal history including theft and bad checks. Paul Barnes also has pleaded guilty to theft charges in the past, court records show.