Michael Brown, chief executive officer of Credit Bureau Center, LLC, pled guilty on March 30 to charges related to a nationwide online marketing scheme involving fake rental advertisements. The plea was announced by United States Attorney for the Southern District of New York Jay Clayton. Brown admitted guilt before U.S. District Judge Katherine Polk Failla to one count each of conspiracy to commit wire fraud and wire fraud.
The case highlights the risks consumers face when searching for housing online. According to authorities, the fraudulent operation induced potential renters across the country—including in cities such as New York City, Miami, Atlanta, Houston, Los Angeles, and San Diego—to provide credit card information under false pretenses and enroll in unwanted monthly credit monitoring services.
“Many Americans rely on online websites to safely and securely search for housing,” said U.S. Attorney Jay Clayton. “For years, Michael Brown perpetrated an online scam by tricking ordinary Americans looking for housing, including here in New York, into paying for services they did not need and did not want. The defendant’s company made millions from over 160,000 victims. Mass online fraudsters try to hide by hitting each victim for a small amount. As demonstrated in this case, that will not work.”
According to charging documents and public court proceedings referenced in the announcement, Brown owned MyScore LLC—later known as Credit Bureau Center—which operated several websites offering credit reports and monitoring services under various names including eFreeScore.com and FreeCreditNation.com. Through affiliate marketers posting fake rental ads with below-market prices on classified advertisement sites (the “Advertising Website”), prospective renters were lured into providing personal details after being told they needed a credit report before viewing properties that did not exist or were unavailable.
Once individuals entered their information on these sites following instructions from supposed property owners via email correspondence—which falsely claimed flexible terms or recent renovations—they were charged $1 up front but automatically enrolled in recurring memberships costing about $29.94 per month unless canceled.
Despite numerous complaints from customers and consumer organizations about misleading advertisements and unauthorized charges between at least 2014 through January 10, 2017, Brown continued operating the scheme which generated more than $6.8 million from at least 169,000 customers out of approximately 2.7 million unique visits.
Brown faces up to forty years in prison with sentencing scheduled for September 1 before Judge Failla; however actual sentencing will be determined by the judge based on statutory guidelines set by Congress.
Clayton praised both the Federal Bureau of Investigation’s investigative work and assistance provided by the Federal Trade Commission during this case’s prosecution.
