July 27, 2004 Daily Business Review
By: Pat Dunnigan
Hollywood company that sold Internet kiosks to investors is the target of several Broward Circuit Court lawsuits alleging fraud and racketeering, and has been ordered to repay investors in at least three arbitration cases.
In June, Fort Lauderdale tennis coach David McBrayer filed suit in Broward Circuit Court against Nationwide Cyber Systems Inc., its president and chief executive officer Farris L. Pemberton, its executive vice president Paul S. Pemberton and four other employees, alleging the company used false and misleading promises to lure him into paying $26,870 for two Internet terminals.
Earlier this month, an arbitration judgment was entered against the company.
Nationwide Cyber Systems executive vice president Paul S. Pemberton did not respond to telephone messages left on the company’s toll-free phone line.
In an interview last year, he insisted that the company — which he said was owned by his brother Farris Pemberton, a resident of Tennessee — would prove itself in time. The company had “a lot of happy customers,” he said.
According to numerous accounts by unhappy customers related in interviews, posted in Internet forums and described in complaints to the Florida Division of Consumer Affairs, Nationwide pitched its terminals for use in public Internet access kiosks at 25 cents per minute. Its representatives led customers to believe that investors who purchased the machines would pocket revenues of at least $1,000 a month per machine, according to numerous accounts, including more than 100 complaints filed with the state Division of Consumer Services.
Representatives of the computer kiosk industry say Nationwide Cyber Systems’ marketing campaign lured hundreds of people around the country to invest in its terminals. But in many cases investors found that the terminals didn’t work as promised, the revenues were barely enough to cover overhead, and company support was little or nonexistent, according to the lawsuits and consumer complaints.
Miami attorney Frank L. Hollander represents three groups of Nationwide Cyber Systems investors who have sued the company and its principals in Broward Circuit Court. They allege deceptive business practices, fraud, unjust enrichment, violation of the state’s fraudulent practices act and violation of the state Racketeer Influenced and Corrupt Organizations Act.
A second corporation, Transnet Wireless, also is named as a defendant in the suits filed by Hollander. The suits describe Transnet as a subsidiary of Nationwide Cyber Systems incorporated to hold its “ill-gotten gains.”