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Charles P. Farrugia, a defendant in a Federal Trade Commission lawsuit against a telemarketing scheme based in Canada, has agreed to settle Federal Trade Commission charges for his role in allegedly scamming American businesses into paying for business directories and listings they didn’t order.

In May 2006, the FTC charged Ontario-based firms Datacom Marketing Inc., Datacom Direct Inc., Bernard Fromstein, Judy Provencher, Paul Barnard, Judy Neinstein, and Stanley Fromstein with running an allegedly fraudulent cross-border telemarketing operation. Farrugia, who was acting as the corporate defendants’ president when the case was filed, was added as a defendant in Nov. 2006.

Under the settlement entered by U.S. District Court in Chicago on Wednesday, Farrugia is barred from misrepresenting that consumers have a pre-existing business relationship, that consumers have agreed to purchase business directories or listings in directories, or that consumers owe money for business directories or listings in directories, according to the FTC. He also is barred from misrepresenting, or failing to disclose, any fact material to a consumer’s decision to purchase or use any product or service, according to the FTC.

The settlement includes a $7,603,094 judgment against Farrugia, which will be suspended upon payment of $275,000 in a specified timely manner. The full judgment will be imposed if the defendant fails to meet the specified payment terms or is found to have misrepresented his financial condition, according to the FTC.

In addition, during outbound telephone calls, Farrugia is barred from failing to disclose the seller’s identity, that the call’s purpose is to sell goods or services, and the nature of the goods or services. He also is prohibited generally from violating the Telemarketing Sales Rule, according to the Commission.

The settlement also prohibits Farrugia and his agents from selling, disclosing, or otherwise benefiting from consumers’ personal information obtained from the activities alleged in the Commission’s complaint.

In addition, the settlement prohibits Farrugia from attempting to collect payment on any account established prior to entry of the court’s order, and cashing checks, totaling about $470,000, sent by American consumers, according to the FTC.

This case is on file in U.S. District Court for the Northern District of Illinois.