In the Matter of the Complaint Against

SCOTT DAVID WILCOX,
VERNON FRAZIER,
ADCO MARKETING CORPORATION d/b/a,
AMERICAN PUBLISHING,
781 W. Oakland Park Blvd. at
Fort Lauderdale, FL 33311-1729

P.S. Docket No. 23/70

Quentin E. Grant Chief Administrative Law Judge

APPEARANCE FOR COMPLAINANT:
H. Richard Hefner, Esq.
Don Potter, Esq.
Consumer Protection Division
United States Postal Service
Washington, DC 20260-1112

APPEARANCE FOR RESPONDENT:
Frank J. Shannon, III Suite 801
The Candler Building
127 Peachtree Street, N.E.
Atlanta, GA 30303-1810

INITIAL DECISION

In a Complaint filed on February 11, l986, (as amended), the General Counsel of the United States Postal Service alleged that Respondents are violating 39 U.S.C. 3005 by engaging in a scheme or device to obtain money or property through the mails by means of false representations. Specifically, Respondents are alleged to advertise through direct mail circulars seeking remittance of money or property through the mails books entitled, Who's Who in the United States , Who's Who in Society , Who's Who in New York , and, Who's Who in California . The circulars are alleged to make the following false representations in furtherance of the scheme:

(a) Respondents publish a book that is recognized in the professional community as a valuable source listing of outstanding individ- uals.

(b) Respondents produce "the most important publication in America," which enhances the employment and career opportunities of those individuals listed.

(c) Respondents employ a staff which researches potential candidates for inclusion in its proposed publication based on a review of news articles, editorials, trade publications, social registers, and professional membership rosters.

(d) Respondents have published editions of Who's Who in the United States prior to 1986 and have distributed copies of each volume to major libraries, journalists, historians, researchers, and the Library of Congress.

(e) Respondents are affiliated with Marquis Who's Who, Inc., which regularly publishes bio- graphical resource books, including "Who's Who in America."

(f) Respondents have published editions of Who's Who in Society , Who's Who in New York , Who's Who in California , or some other biograp- hical resource index prior to 1986 and have distributed copies of each volume to major libraries, journalists, historians, researchers, and the Library of Congress.

(Complaint Par. 4, as amended)

Complainant requests the issuance of the appropriate orders authorized under 3005.

Respondents' Answer to the Complaint alleges lack of jurisdic- tion, both personal and subject matter, over respondents Vernon Frazier and ADCO Marketing Corporation, denies that ADCO is a corporation, and denies that it does business under the name American Publishing. The Answer also denies all allegations contained in the Complaint concerning a scheme or device and the making of false representations.

A hearing was held in Washington, D.C. on April 9, l986. Witnesses for Complainant, in order of appearance, were Debora L. Keenan, Linda Basilick, James Clark, Judy Pancoast, Brian Kuhn and Postal Inspector John McNamara. Respondent Scott David Wilcox was Respondents' sole witness.

The parties have filed proposed findings of fact, conclusions of law, and written argument all of which have been considered in reaching this decision. They have been adopted to the extent indicated. Otherwise they have been rejected as irrelevant, immaterial, or contrary to the evidence.

FINDINGS OF FACT

1. ADCO Marketing Corp. (ADCO) is a corporation incorporated in the State of Delaware on October 19, l983. According to a copy of its certificate of incorporation, certified as true and correct on March 31, l986, ADCO's managing stockholder is Vernon R. Frazier of 2120 Crestmoor, Suite 275, Nashville, TN 37215. The incorporator, not named as a respondent, is Marcia A. Jenkins of Wilmington, Delaware (CX-32). ADCO Marketing Corp., according to a Certificate of Assumed Business Name filed by its president, Vernon R. Frazier, does business under the assumed business name American Publishing at 1601 E. Main, Suite 9, Plainfield, IN 46168 (CX-31).

2. On January 7, l986, Scott D. Wilcox, representing himself to be the owner of, and doing business as, American Publishing at 781 West Oakland Park Blvd., #117, Ft. Lauderdale, FL 33311, filed an application (PS Form 1583) for delivery of mail through an agent, The Mail Answer Inc., at 781 West Oakland Park Blvd., Ft. Lauderdale, FL 33311. The business address of American Publishing as set forth in the application is 1601 East Main St., Plainfield, IN 46168. One of the references given on the application is Vern Frazier, 3910 Granbrook Dr., Indianapolis, IN 46240.

3. In November and December 1985, ADCO ordered from Marquis Who's Who Inc., (Marquis) copies of Marquis publications entitled Who's Who in America , Who's Who in Finance and Industry , Who's Who of American Women , Who's Who in American Law , Who's Who in Frontier Science , and Who's Who in the Midwest (CX-23 through 29; Pancoast, Tr. 71, 72). Marquis included in those publications a number of fictitious names and addresses called "seed" names. The inclusion of these names and addresses, unavailable in other sources, is a device to enable Marquis to determine whether third parties are using its publications as mailing lists (Tr. 72, 73, 84, 92). Fol- lowing the sale of these publications to ADCO, Marquis received from American Publishing, through the monitoring service employed by Marquis, sixteen solicitations for purchase of American Publishing's Who's Who in the United States or Who's Who in Society addressed to "seed" names (Tr. 78, 79, 92, 93).

4. American Publishing uses direct mail solicitations in seeking remittances of money or property through the mails for Who's Who in the United States , Who's Who in Society , and Who's Who in New York . The address used by American Publishing for this purpose is 781 W. Oakland Park Blvd., Suite 117, Ft. Lauderdale, FL 33311 (CX-1 through CX-3B; CX-9, 13, 20; CX-4 through CX-8; CX-33 through CX-35B).

5. Underscored below is each representation alleged in the Complaint, as amended, followed by findings relevant thereto:

(a) Respondents publish a book that is recognized in the professional community as a valuable source listing of outstanding individ- uals.

This representation is made in the following language of the solicitation:

"The purpose of our program is to provide broader recognition of your achievements. To accomplish this, we distribute copies of each volume to major libraries, journalists, histori- ans, researchers, and the Library of Congress. Experience has demonstrated that this procedure has afforded invaluable assistance to those bio- graphees selected, as it provides a unique oppor- tunity to present their accomplishments to those persons responsible for career advancement and employment decisions."

(CX-1)

"Our research staff of professional editors emphasizes that the qualifications of the indi- viduals nominated are in accordance with their value as a reference tool. A nominee's position or accomplishments in business or civic activi- ties is information regarded as essential to librarians, researchers, students, politicians, business executives, scientists and media journa- lists."

* * *

American Publishing's WHO's WHO in the UNITED STATES is published and distributed as a valuable reference tool for librarians, researchers, students, politicians, business executives, scientists, and media journalists."

* * *

(CX-2B)

(b) Respondents produce "the most important publication in America," which enhances the employment and career opportunities of those individuals listed .

This representation is found in the following language:

"The Most Important Publication in America]

(CX-2A)

Experience has demonstrated that this procedure has afforded invaluable assistance to those biographees selected, as it provides a unique opportunity to present their accomplish- ments to those persons responsible for career advancement and employment decisions.

(CX-1)

(c) Respondents employ a staff which researches potential candidates for inclusion in its proposed publication based on a review of news articles, editorials, trade publications, social registers, and professional membership rosters .

This representation is found in the following language:

"Individuals are chosen in concurrence with high objective criterion established by American Publishing. Our research staff of professional editors emphasizes that the qualifications of the individuals nominated are in accordance with their value as a reference tool.

* * *

Where did you obtain my name?

The names of American Publishing's WHO's WHO nominees are carefully selected from numerous sources such as news articles, editorials, trade publications, social registers, and professional rosters."

(CX-2B)

(d) Respondents have published editions of Who's Who in the United States prior to 1986 and have distributed copies of each volume to major libraries, journalists, historians, researchers, and the Library of Congress .

This representation is found in the following language:

The purpose of our program is to provide broader recognition of your achievements. To accomplish this, we distribute copies of each volume to major libraries, journalists, historians, researchers, and the Library of Congress. Experience has demonstrated that this procedure has afforded invaluable assistance to those biographees selected, as it provides a unique opportunity to present their accomplish- ments to those persons responsible for career advancement and employment decisions. We have also learned that many of the featured biographees order personal copies to keep as a cherished record of their accomplishments.

(CX-1)

"The Most Important Publication in America]"

(CX-2A)

The specific criterion for each professional field has evolved to best represent their achievers. This type of selection process alone has set American Publishing's WHO'S WHO in the UNITED STATES apart from all other WHO'S WHO publications.

(CX-2B)

The representation as to previous editions is also made by implication in the repeated references in the solicitation to the 1986 Edition which, read together with the above language, indi- cates that there are earlier editions.

e. Respondents are affiliated with Marquis Who's Who, Inc., which regularly publishes bio- graphical resource books including Who's Who in America .

This representation is not made expressly or by implication in Respondent's solicitation.

There are many Who's Who publication beside those published by Marquis (Tr. 57-61 (Clark); Tr. 88 (Pancoast); Tr. 126 (Wilcox). Consequently, the use of the words Who's Who does not in itself constitute a representation that Respondents are affiliated with Marquis Who's Who, Inc. Further, the following language in Respon- dent's solicitation tends to dispel confusion between Respondent's publication and Who's Who volumes published by others:

"This type of selection process alone has set American Publishing's WHO's WHO in the UNITED STATES apart from all other WHO's WHO publica- tions."

(CX-2B)

(f) Respondents have published editions of Who's Who in Society, Who's Who in New York, Who's Who in California, or some other biogra - phical resource index prior to 1986 and have distributed copies of each volume to major libraries, journalists, historians, researchers, and the Library of Congress .

There is no evidence in the record concerning Respondents' publication of Who's Who in California . There is, however, evidence that Respondents advertise by means of direct mail solicitations publications entitled Who's Who in Society and Who's Who in New York [CX-4 through 8; CX-33 through 35B). The solicitations for purchase of these publications contain language identical to the language cited under representation (d), supra . On that basis I find that Respondents make, as to these two publications, the representation set forth in paragraph (f).

6. Prior to the 1986 edition advertised in the solicitations in evidence, Respondents did not publish any of the Who's Who publica- tions involved in this proceeding (Wilcox, Tr. 130). Therefore, the representations alleged in paragraphs (a), (b), (d) and (f) of para- graph 4 of the Complaint and found to be made by Respondents in FOF 5, supra , are false. A book that has never been published cannot have achieved recognition in the professional community as a valu- able source listing of outstanding individuals, cannot truthfully be said to have be "the most important publication in America" which enhances the employment and career opportunities of individuals listed, and cannot have been distributed to major libraries, journalists, historians, researchers, and the Library of Congress.

7. Respondents employ a staff which researches potential candi- dates for inclusion in its proposed publications based on review of the kinds of sources listed in representation (c) plus other sources such as the Marquis Who's Who in America and Who's Who in Law (Wilcox, Tr. 124, 125). Therefore, I find that Complainant has not shown representation (c) to be false.

8. Representations (a), (b), (d), and (f) are material because they create the impression that the publications advertised in Respondents' solicitations are legitimate, recognized, and respected and, therefore, tend to induce readers of the solicitations to pur- chase them (Keenan, Tr. 12, 13, 31; Basilick, Tr. 37, 43, 44, 46; Clark, Tr. 52, 59, 60).

CONCLUSIONS OF LAW

1. The meaning of advertising representations is to be judged from a consideration of an advertisement in its totality and the impression it would most probably create in ordinary minds. Donaldson v. Read Magazine , 333 U. S. 178 (1948); Vibra-Brush Corp . v. Schaffer , 152 F. Supp. 461 (S.D.N.Y. 1957); Borg-Johnson Electronics v. Christenberry , 169 F. Supp. 746 (S.D.N.Y. 1959). Express representations are not required. It is the net impression which the advertisement is likely to make upon purchasers to whom it is directed which is important, and even if an advertisement is so worded as not to make an express representation, if it is artfully designed to mislead those responding to it the mail fraud statutes are applicable. G. J. Howard v. Cassidy , 162 F. Supp. 568. See, also, Virginia State Board of Pharmacy v. Virginia Citizens Council , 425 U. S. 748 (1976). The foregoing principles were employed in determining whether Respondents' advertising makes the representa- tions alleged in subparagraphs (a) through (f) of paragraph 4 of the Complaint, as amended.

2. Respondents' advertisements make the representations alleged in subparagraphs (a) through (d) and (f) of paragraph 4 of the Com- plaint, as amended. They do not make the representation alleged in subparagraph (e).

3. The representations found above are material because they have the effect of inducing individuals to remit money through the mail to purchase the products in question.

4. The representations made by Respondents, except for that set forth in subparagraph (c), are false. Complainant has failed to prove the falsity of the representation set forth in subparagraph (c).

5. Complainant has established its case, to the extent found above, by a preponderance of the reliable and probative evidence of record. S.E.C. v. Savoy Industries , 587 F.2d 1149, 1168 (D.C. Cir. l978).

6. Scott D. Wilcox, doing business as American Publishing, is a person conducting a scheme within the meaning of 39 U.S.C. 3005 (a)(3). A cease and desist order should run against him individ- ually.

7. Although Respondent Wilcox in his testimony denied that American Publishing has anything to do with Adco Marketing Corp. and that Vernon Frazier, and Adco Marketing Corp. have anything to do with Wilcox's compilation of biographical data (Tr. 124), the docu- mentary evidence of record persuasively shows that American Pub- lishing is an assumed business name of Adco Marketing Corp., that Vernon R. Frazier is president of Adco Marketing Corp. (FOF 1, 2) and that Adco Marketing Corp. was instrumental in securing names of potential customers for the publications advertised in American Publishing's direct mail solicitations (FOF 3). The testimony of Scott D. Wilcox did not purport to explain away this evidence. Respondents failed to adduce through testimony or otherwise probative evidence sufficient to rebut Complainant's case as to the involvement of Adco and Vernon Frazier in the scheme involved in this proceeding. Accordingly, Adco Marketing Corp. and Vernon Frazier are found to be persons conducting a scheme within the meaning of 39 U.S.C. 3005 (a)(3). The cease and desist order should run against both.

8. Respondents are engaged in the conduct of a scheme or schemes for obtaining money or property through the mails by means of materially false representations in violation of 39 U.S.C. 3005. Accordingly, a False Representation Order and a Cease and Desist Order in the forms attached hereto should be issued against Respondents.