The Grift of Gab

Stephen Tashman made a small fortune launching Telecard Dispensing Corporation. If only his investors had been so lucky.

Joiner and his wife visited many stores and even a U.S. Air Force base that locators promised as placement venues. The Joiners received the same disheartening responses: All of the store owners with whom they negotiated had no interest in placing their machines. And although TDC assured exclusive territories, Joiner says he and his wife came across TDC machines and phone cards within blocks of their home.

"I was steamed. My wife and I had already spent at that point hours and hours driving around, doing what we didn't want to do, finding locations," says Joiner. "We kept on digging around and found two locations on our own, one in a donut shop, one in a dry cleaner's. In a month and a half, they sold a combined total of one card."

Months of back-and-forth between Joiner and TDC finally forced the company to find one location in the mountains approximately 50 miles from Joiner's home. The Joiners cinched two other locations on their own. Unfortunately those were within a block of one another. At that point Joiner felt compelled to take what he could get.

Just another day at the office: Tashman outside a new Hollywood phone-card company
Joshua Prezant
Just another day at the office: Tashman outside a new Hollywood phone-card company

He says that none of the machines ever prospered or even came close to garnering the earnings initially conveyed by TDC. More problems developed. Joiner claims that several times during his dealings with TDC, the cards became inoperative. Joiner continually had to visit machines, post signs of disrepair, and replace bad cards. In the summer months, sales remained inconsistent. When winter descended upon the Rockies, the traffic of potential card buyers dwindled, and already erratic sales practically vanished. By the spring of 1999, the machine placed in a mountain grocery store by TDC was stolen. The other two now gather dust in Joiner's garage.

"It's been one of the most irritating and disgusting experiences of my life," he says.

After 15 months' worth of calls and letters that were not returned, Joiner contacted the FTC. That contact is the reason he appears in federal court on the third day of trial, even though he found the trip to West Palm Beach debilitating because of his poor health. Joiner felt compelled to go.

"I'd like the satisfaction of knowing these people are not going to do this kind of thing again," he says.

Inside the courtroom Joiner slowly makes his way to the witness stand. He's exhausted from the long flight, and his face is gaunt. Unable to make the journey alone, his wife accompanied him and now watches as he recounts his dealings with TDC in a quiet outrage. Before he leaves the stand, Joiner receives one final slap in the face. The FTC inquires whether he knew about the checkered legal histories of Tashman and some of his codefendants. The federal agency claims that, for Tashman, this past includes a previous injunction against him by the FTC, a conviction for securities fraud in Texas, a lawsuit filed by the SEC that resulted in a permanent injunction, and cease-and-desist orders in six states.

Before answering Joiner's face pales. His voice rises a pitch, and he grinds out his response through a clenched jaw. "I would not have put a nickel in this thing if I had known anything about that."

Another former investor echoes Joiner's sentiments.

"They stuck it right to me," says Richard Blake about his dealings with TDC. Blake already gave his testimony, but he sticks around this afternoon to check out Joiner's and a few others'. Blake says he first contacted the company in the fall of 1997 from his home in eastern Texas. He too heard an advertisement on the radio, and similar to other investors, Blake churned through TDC's sales maneuvers and confronted fronters lauding juicy returns and minimal work. He picked up two extra machines at the prompting of a loader, and he endured locators disinterested in placing his products.

"Customer service was a joke. It was customer disservice. They treated you like you were a pain in the butt and you were bothering them," says Blake, who also says he slogged through several low- to no-traffic venues provided by TDC locators. He finally gave up trying to squeeze a profit from his venture when he learned that TDC sold phone cards directly to a store that also housed one of his machines. The owner told Blake that TDC had offered him phone cards at the same rate as Blake's and that the store didn't need his machine anymore. "You were doomed no matter which way you turned," says Blake.

By the end of his year-and-a-half relationship with TDC, Blake had sunk about $24,000 into his ventures. He managed to recoup $15,000 through an uneven trickle of phone card sales and by selling one of his machines. The other three still sit in his garage.

"It'll be a cold day in hell before I respond to any business opportunities that I hear on the radio," says Blake, who unknowingly offers a wise caveat. In court documents the FTC claims that Blake, Joiner, and other TDC customers now join a legacy of investors duped by Steve Tashman.

"Several times before Defendant Tashman has been a party defendant in an advance fee scheme where consumers lost thousands of dollars as a result of misrepresentations; this is not the first time consumers have lost money in a scheme where Defendant Tashman was involved, and it is likely he will engage in similar future schemes," the FTC alleges.

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