> ## Content Index
> Fetch the complete content index at: https://www.smdp.com/llms.txt
> Use this file to discover other available public pages before exploring further.

# In the business of disrepair
- URL: https://www.smdp.com/in-the-business-of-disrepair/
- Published: 2006-09-27T15:00:00.000Z
- Updated: 2026-10-23T21:26:21.000Z
- Author: Kevin Herrera
- Tags: Business, Santa Monica, #archive-import

*Schemers called Santa Monica home*

CITY HALL — Prosecutors with the City Attorney’s Consumer Protection Unit on Tuesday celebrated their latest victory in the battle against fraud — a settlement agreement that includes nearly $11,000 in restitution to victims of a credit repair scheme Master Credit Corp., which operated using a Santa Monica post office box, and owner Santi Khamvongsa pleaded no contest last week to the criminal charge of false advertising and have agreed to pay a dozen Californians $10,775 within two years or face an additional $1,000 fine, said Gary Rhoades, an attorney for City Hall.

The defendants will also serve three years probation, cancel all advertising in California and be forbidden from engaging in any credit-related work in the state unless they post a $100,000 bond with the U.S. Department of Justice, according to the settlement agreement.

The victims of the scam said they paid, on average, more than $500 to have Master Credit help them improve their credit records by resolving any unpaid bills or other financial disputes. The company did nothing, according to Rhoades, who filed the case in Santa Monica Superior Court on June 29.

Master Credit also claimed non-profit status, but in a separate action, that status was stripped by the Internal Revenue Service.

Representatives from Master Credit could not be reached for comment.

“This case puts consumers on notice that they should research companies before paying for such services,” said Rhoades. “This case also tells ‘credit repair’ companies that they will face criminal charges if they don’t obey the law.”

Rhoades said the case began when one customer called the Consumer Protection Unit to file a complaint, noticing Master Credit was using a Santa Monica mailbox. Investigators with City Hall checked with the Better Business Bureau and found there had been other complaints against Master Credit that were filed by victims from various cities in California. Master Credit was advertising over the Internet and in the Yellow Pages, Rhoades said.

After the defendants failed to appear in court for their Aug. 2 arraignment, the City Attorney’s Office obtained arrest warrants and contacted the defendants at their Las Vegas office. Representatives with Master Credit voluntarily appeared in court and entered the plea agreement. Under state law, it is unlawful for someone to engage in false advertising, Rhoades said.

While none of the victims are Santa Monica residents, Rhoades said it is the philosophy of the Consumer Protection Unit to be “proactive” so that no one is victimized, regardless of where they reside.

There has been a history of credit repair companies defrauding consumers. The Federal Trade Commission has set up a web site dedicated solely to warning consumers about the fraud, and the state Legislature passed protections forcing these businesses to register with the Department of Justice and to post a bond whether they have run into trouble or not.

Non-profits are exempt. “Our primary purpose in the Consumer Protection Unit is to provide a service for consumers where they can turn when they are running up against groups, especially corporations, that are taking advantage of them, so we’re happy that in this matter,” said Rhoades. “Not only were we able to get restitution for the victims, but we were able to do it relatively quickly and keep (Master Credit) out of California to protect against further injuries.”

*Originally published in the Santa Monica Daily Press print edition on September 27, 2006.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/092706.pdf?ref=smdp.com)