Tuesday, October 20, 2020

Miami financier Robert Zangrillo accused of running DMV scam website


Robert Zangrillo — the partygoing, celebrity-adjacent venture capitalist pushing to build one of the most controversial real-estate projects in Miami — is now wrapped up in his second legal scandal with federal authorities in just eight months. Zangrillo is one of 53 people accused of bribing college admissions administrators to let their kids attend top-flight schools. He’s still fighting that case.

But now, the Federal Trade Commission (FTC) says Zangrillo also has helped run a series of high-profile scam websites. The sites — including the high-traffic DMV.com — purported to be affiliated with state or local governments, but, per an FTC complaint filed in December, actually just took customers’ money and data and directed them to other information that was publicly available online.

In an email to New Times, however, Zangrillo’s lawyers dispute the charges and say the FTC has some basic facts wrong, including its claim Zangrillo owns the company.

According to a December 9 FTC complaint, Zangrillo and a team of associates used a byzantine network of companies to game Google search results and become the top hit for people searching phrases such as “section 8 housing apply,” “get fishing license,” and “renew Florida drivers license online.” Those users would then be sent to sites that appeared to be places to obtain, say, an online license renewal but in reality just took people’s money, even those looking for food stamps and unemployment assistance.

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The feds say Zangrillo’s sites often asked people to fill in personal information, such as their home addresses, salaries, and phone numbers. The FTC says he and his team then sold that information and made millions. The feds allege Zangrillo violated Section 5(a) of the Federal Trade Commission Act, which prohibits “unfair or deceptive acts or practices in or affecting commerce.”

Zangrillo’s venture capital firm, Dragon Global (which is also named in the FTC case), is a major investor in the embattled Magic City Innovation District, a real-estate venture that, if built, would rapidly gentrify the working-class, mostly minority neighborhood of Little Haiti and likely force many longtime residents out of the area. Protesters have repeatedly shown up at Miami City Commission meetings to speak out against the project.

But the city commission has continued to move forward with the plan, even after Zangrillo — along with celebrities Lori Loughlin and Felicity Huffman — was charged with bribing the University of Southern California so one of his daughters could attend the school. (In the meantime, while out on bond, Zangrillo — a friend of the Hadid family and other celebrities — attended a birthday party with Snoop Dogg.) In court documents, the FTC says the Zangrillo-owned company that ran the scam sites, On Point Global, was headquartered at Dragon Global’s building on NE 60th Street in Little Haiti.

“Indeed, Zangrillo acquired the headquarters building for On Point through a company called ‘Magic City Properties,’ which is Dragon Global’s branding for its Miami real-estate development projects,” the FTC said last month.

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Via email, one of Zangrillo’s lawyers, Matt Schwartz, tells New Timesthat his client did not have any control of the business and that he was purely an investor in On Point.

“Mr. Zangrillo denies these misguided allegations, many of which are demonstrably false,” Schwartz says. “For example, contrary to the allegation that he is chairman of On Point Global, Mr. Zangrillo is in fact neither chairman nor an officer of the company — he is an investor. As a successful businessman for more than 25 years, Mr. Zangrillo’s financial endeavors have established him and his firm as a leading investor in transformational and innovative companies across multiple technology sectors. In his role as an investor and limited partner in numerous organizations, Mr. Zangrillo monitors his investments under his companies’ investor rights but has no role in the day-to-day operations of his portfolio companies.”

But the feds allege that, through On Point Global, Zangrillo owned the website floridadriverslicense.org, which offered users links to “get started with online application assistance.” Clicking those links would send users to another Zangrillo-owned site that made them pay for information to obtain new driver’s licenses or replace their old ones. The word “information” here is key: Zangrillo’s sites would allegedly charge a fee, send users publicly available information, and then nothing else would happen. The FTC says the sites seemed designed to scam people into thinking they were paying a government agency to renew their licenses.

“After consumers submit payment, in some instances, the site simply links back to the landing page, and the consumer receives nothing,” the FTC says. “In other instances, the consumer receives an email containing a link to a downloadable PDF. The PDF contains general, publicly available information about the service the consumer sought (i.e., driver’s license or car-registration services). Regardless of whether the consumer received the PDF guide, Defendants charge consumers’ credit or debit card twice. The first charge is smaller (in numerous instances, $3.99), and the second is larger (in numerous instances, $19.99).”

Small disclaimers on the sites claimed they were “not affiliated with any government agency” or “privately owned,” but the feds say those warnings were not highly visible and were difficult for many consumers to understand. Plus, many of Zangrillo’s sites were the first search hits for popular terms on Google. As of June, the feds say, searching “get fishing license” resulted in Zangrillo’s fishinglicense.org as the first sponsored link.

Some of his sites allegedly scammed people who were in dire straits. The FTC says Zangrillo owned section-8-housing.org, food-stamps.com, unemploymentassistance.org, and veteran-affairs.org. His benefits websites, for example, asked users to provide a ton of personal details, including their employment status, home addresses, and social security eligibility.

“Consumers seeking public benefits would reasonably expect to answer such questions to obtain an eligibility determination,” the FTC said last month.

FTC agents conducted a sting transaction on section-8-housing.org in May. After filling out waves of personal data, the feds received only a PDF email in response that contained generic public information about the federal Section 8 low-income housing program.

“Typical information collected by Defendants on their motor vehicle-related website includes consumers’ full name, address, date of birth, email address, gender, and telephone number. Typical information collected by Defendants on their public benefits website includes aIl of the above and consumers’ employment status, income range, credit card debt, medical and health conditions, and health insurance status,” FTC documents state. “Defendants have received millions of dollars from selling the personal data they collected from consumers through deceptive marketing.”


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