Tax Club Inc. to pay $15.6M to allegedly duped business owners

The Tax Club Inc., a company based in

The Tax Club Inc., a company based in the Empire State Building, was accused by New York State Attorney General Eric Schneiderman and the FTC of deceptive business practices and false advertising. Above is a view of the Empire State Building from Queens Boulevard. (Credit: Steven Sunshine, 2013)

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A Manhattan company that promised help in launching home-based businesses has agreed to pay $15.6 million in restitution to customers nationwide that it allegedly deceived, including four from Long Island, State Attorney General Eric T. Schneiderman and the Federal Trade Commission announced Tuesday.

The Tax Club Inc., based in the Empire State Building, was accused by Schneiderman's office, the Florida attorney general and the FTC of deceptive business practices and false advertising. A spokeswoman for Schneiderman said the company is no longer in business.

Tax Club, which was still answering its phones Tuesday, referred questions to its attorney, Derek Young, who said in an email that the FTC and attorneys general "overreached in a case bolstered more by hyperbole than fact. My clients made a measured business decision to settle without any admission of culpability rather than continue in protracted, costly litigation." He did not answer a question about whether Tax Club is still in business.

Consumers receiving restitution include 26 New Yorkers. Their names were not made public, nor was the number of consumers nationally to receive restitution.

The Tax Club "took millions of dollars from consumers by allegedly misleading them into believing that its purported services would help consumers' home-based businesses succeed," Schneiderman's announcement said. "Many of the services offered were actually unnecessary -- and were never provided."

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