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Get your (not-so) free grant money

What's the deal with those stimulus scams that are all over the Internet?

By Chadwick Matlin

The Big Money

updated 8:06 p.m. ET, Wed., Feb. 25, 2009

Meet Kevin Hoeffer. Kevin is an altruistic man who just received $12,759.62 from the federal government. He wants all of the readers of his blog to be able to do the same. So he points the way to a free grant kit (plus $1.99 shipping and handling) to use to apply for a government handout. Once you do that, you'll get your $12,000. It's that simple. He even provides a copy of his official Treasury grant check to prove its legitimacy (see above.)

Sure, the name on the check is a little fuzzy ... but he was probably just protecting his identity! And how can you distrust a "proud firefighter and family man" and a Texan through and through? The photo makes him look like an all-American boy who met the woman of his dreams and started a family.

Kevin is not alone in his fortune. Meet Tom Donahue, a "proud firefighter and family man" born and raised in New York, who is also a grant recipient. Judging by the photo on Tom's site, he's Kevin's estranged twin. We'd run the image, but you can just look above at Kevin's — it appears to be the exact same as Tom's.

But please don't confuse him with Jeff Donahue, who also got a fuzzy grant check. And then there's Joe Hoeffer (Kevin's brother?), a man with the same face and the same blog layout as Kevin, Tom, and Jeff. Mike Russo, too. And Sam Kelley. And Ben Karlson.

And in case you thought this incestuous Web ring was sexist, there's also a place for Mary Cestaro, the "proud business woman by day and a wonderful wife by night" of all these doppelgängers.

These people are the faces of a new, pervasive scam that's piggybacking on Washington's stimulus agenda. All of the blogs tell you to use the free software to get the $12,000 grants. To order that software, the blogs link off-site to a variety of Web sites filled with testimonials about how great their free grant-finding software is. What they don't say is that if you fail to cancel your subscription — a subscription the sites don't reveal exists outside — they'll charge your credit card until you discover their scheme and tell them to stop. (The going rate seems to be $50-$70.) It's a devious system whose ads are proliferating across the Internet and has embarrassed Facebook into pulling them down. A close read of the scams' semiotics offers an insight not just to our weakness for get-rich-quick schemes, but also our current economic moment.

These grant sites have been around for many years, but they're now enjoying a resurgence. The political rhetoric in Washington has all but equated the phrase stimulus check with free grant. Thus, the opportunity for these scam sites has emerged. Links to the blogs have been filtered into text ad networks, which mean they can appear on any Web site using third-party ad suppliers. And with the ad market suffering across the Web, there's more and more likelihood that this riffraff will bubble to the top, since scammers are the ones with money to burn on advertising budgets these days.

Case in point: Just now I was reading an e-mail from the White House on Obama's address to Congress. Gmail's sponsored link that ran on top of the mail led to obamaseconomicstimulus.com, another gateway blog with a blurred check and a relatable story.

At this point, the tag line on the ad should sound familiar: "Read How I Got a $12k Check From The New Economic Stimulus Package." It almost sounds like news from an RSS feed.

This time, the grantee is Jake Miller; 22 years old, married three years, two kids, just lost his job as an "assembly line worker in an auto parts factory." He is an embodiment of the blue-collar American cliché. The site suggests that the government is finally taking care of Main Street, not just Wall Street, and I should get my due.

Google issued the following statement regarding the advertisements: "As Google is not affiliated with these sites, we can't comment on individual claims. However, we recommend that users exercise the same amount of caution they would when evaluating other types of get rich quick claims.")

The ads were especially endemic to Facebook, seemingly appearing at least once a visit on the right side of the page. Reader Eric Francis sent in some of the ads he was seeing on his Facebook pages (see below). Note the use of the word stimulus, rooting the ads in the news and implying that there could be an unexplored angle in Washington's bailouts.

This led to a minor rebellion in which users started reporting the ads for objectionable content and, as longtime Slate contributor Paul Boutin noted on the Industry Standard, moaning about it on Twitter. (You know we've reached a special kind of frivolous irony when Facebook is held accountable by the Twittering throngs.)

Facebook eventually took down the ads two weeks ago, according to a spokeswoman, because it violated Section 9 of its ad guidelines, which prohibits "scams, illegal activity and/or illegal contests, pyramid schemes, or chain letters." It credited its users for flagging the content. "In this case, users informed us about misleading offers in many ads with promotions related to the U.S. economic stimulus package," read the statement. But that doesn't explain how these ads got through in the first place. When asked about how they slipped through, the Facebook spokeswoman e-mailed, "We use a combination of methods, but don't discuss the specifics."

Intriguingly, all of the ads I've seen link to only the gatekeeper blog sites. None of them links directly to the Web sites where you actually sign up for the shady grant software and its onerous subscription. It's as though they're the warm-up con artist who greases your wallet for the main act. The gateway blogs appear to be purely altruistic parties with no revenue stream available. This helps engender trust with the audience, since the blogs can't possibly be ripping you off if they have nothing to gain from the deal. But in reality, there is reason to believe that the blogs are profiting. The grant-software sites appear to be tracking referrals from the gateway blogs, and there may be some revenue sharing at play. (You can tell by the "hitid" section of the grant sites' URLs, which vary depending on which gateway blogs you use to arrive at the site.)

Most importantly, the gateways provide a personable introduction to an anonymous scam. All of the blog owners are hardworking Americans who just fell a little behind on their bills and caught a few bad breaks. But luckily, they applied for a grant and got "the money that the government owes you," or so says a passage at the top of all these Web sites. Again, the sites tap into the populist anger in the country while also saying that the government (read: Obama) is finally taking care of its people.

The Obama love continues when you get to the actual grant-software sites. There are several sites that the different blogs link to, many of them with different URLs but the exact same layout and content. It's unclear whether all the copies belong to the same company or if some scammers are getting plagiarized. Regardless, all of them feature two things. First, there are logos of news agencies to lend legitimacy to an illegitimate enterprise. This despite the sites never having appeared in the news agencies' pages or broadcasts. And alongside the logos is always, without fail, our 44th president. The grant-software site that was linked to most often in my adventures had the unfortunately verbose URL of federalgovernmentgrantsolutions.com, and it welcomes you with a note that "President Obama want to issue a STIMULUS PLAN for people in need of government aid and free federal money." (Sketchy-Web site owners do not typically master their subject-verb agreements.)

Further, the grant sites provide one of those creepy floating talking heads in the bottom-right of the screen to tell you how badly Obama wants you to take this money. A transcript of most of her speech:

“Since being elected to office, President Obama's primary goal has been to revitalize the economy. And he plans to do this by putting more money in the hands of Americans just like you and me in the form of government grants. The president and our new government understand the hardships that most Americans have dealt with over the past few years. Rising gas prices, the subprime mortgage collapse, and the rising unemployment rate. So they've just recently set aside more federal funds than ever before to give money to Americans just like you.”

It's a smart strategy to peg the altruism on Obama — polls show most Americans still believe he's our economic savior. Think what his numbers would be if he actually handed out $12,000 checks.

I tried to speak to these grant-software sites for comment, but they were hard to reach. Many of their contact links don't actually lead anywhere, and few phone numbers are listed. But I did find two contact numbers. The first led to a terrifying answering machine message that sounded like it was recorded by an asphyxiating E.T.

The other was discovered deep within a subpage of federalgovernmentgrantsolutions.com. I called the number and was connected to a nice woman named Anne, who informed me that people call asking about GGS every day. When I asked where GGS headquarters were located, she responded that I had reached only the call center, which was in the Philippines. There's some reason to believe it isn't just the call center that's in the Philippines but also GGS's operations. GGS's terms and conditions sheet is tied to a company called JRS Media Solutions. JRS, according to the terms and conditions sheet, is located in Pasig City, Philippines.

But Anne said that GGS was actually located in New York, not the Philippines. Considering I was in New York, I figured I owed them a visit. She gave me their address — 305 West Broadway, No. 114 — and I took the train downtown. GGS's block of West Broadway is a reasonably developed bit of downtown Manhattan, but there are few office buildings nearby. And so, instead of an office at 305 West Broadway, No. 114, I found a mailbox. No. 114 is GGS's mailbox number at the 305 West Broadway UPS, not its apartment or suite number. GGS's footprint in this country is limited to a 2-by-2-inch box. Discouraged, I started walking out of the UPS store but figured I'd ask how much it costs to rent out a mailbox. Five hundred and twenty bucks a year.

I doubt they used federal grant money to pay for it.

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