FTC CLOSES 2 VALLEY FIRMS : SWEEPSTAKES SCHEME INVESTIGATION TARGETS WOODLAND HILLS COMPANIES.

Byline: Deborah Adamson Daily News Staff Writer

Federal authorities have shut down two Woodland Hills firms, accusing them of running a prize-promotion scam.

Family Publishers Clearing Center, also known as American Publishers Clearing Center, and American Enterprise List, doing business as Warner List, were closed last month by the Federal Trade Commission.

The FTC said Friday that Family Publishers received $2 million from about 8,000 consumers nationwide since it started operations in October 1995.

The agency's enforcement action was part of ``Project Jackpot,'' which has resulted in cases against 79 telemarketing defendants in 17 states.

In the Woodland Hills case, the FTC has filed civil action seeking a return of a yet-to-be determined amount to consumers, but no fines are being sought.

No amount yet has been determined for Warner List, which supplied a mailing list for Family Publishers while running its personnel and administrative operations. The FTC believes that the two firms were acting jointly.

The FTC alleged that Family Publishers required customers to buy magazine subscriptions to win prizes and failed to deliver on a promise of ``valuable'' awards.

Customers don't have to pay to play or win a prize, FTC officials said.

Ken Carparoni of Sherman Oaks, Philip Katz of Agoura, Sheldon Katz of Los Angeles and Michael Weiss of Calabasas are the defendants. Carparoni is the owner of Family Publishers. The rest are Warner List executives.

The four were in depositions Friday and could not be reached for comment.

But Alan Pick, attorney for Philip Katz, said the companies have complied with the law.

Family Publishers, which employed 60 people, mailed letters that promise one of five prizes ``absolutely guaranteed'' if the customer buys subscriptions to several magazines.

The prizes are a 1996 Pontiac Grand Am, a 31-inch home entertainment package, a $2,000 cashier's check, a 6,724-square-foot lot or a $1,000 check.

Most of the prizes awarded were a deed of licensing to the lot. Customers were told to pay $24 a year in annual dues for ownership in a future resort in Baja California.

Stephen Cohen, an attorney in the FTC's marketing practices division, said the property ``is a lot of dirt. That's what it is. It's a lot of sand.''

Cohen also noted that Americans cannot own property in Mexico.

But Pick said the property's developer - Dixon Development - intends to build the resort so the land certificate is ``valuable.'' While Americans can't own land in Mexico, the deed of licensing gives them permission to use it, he said.

Pick said he believes the problem is a technical one involving registration and he contends that the defendants are not responsible for clerical mistakes.

He added that Family Publishers did not deal with Dixon directly, but through the Publishers Award Bureau in Orange, which also is being charged by the FTC.

Pick said customers were told that most will win the land certificate. Some were awarded other prizes, such as the $1,000 cashier's check. In addition, customers were informed they don't have to buy anything to win prizes.

But Burt Schultz of Pearl River, N.Y., said he was told by a company representative that he had to buy a subscription to win a prize.

He also said he was not informed that most people will win the land certificates.

``I felt I was scammed,'' said the former Lakewood resident who paid $297 for several subscriptions.

When he called the toll-free number on the letter to ask about the prizes, he was told he could only use the toll-free number once. Schultz asked if he could send a check to pay for the subscriptions, but was told his checking account number was needed so that the money would automatically be withdrawn.

After a few weeks, he received his land certificate.

``I won a 6,000-square-foot piece of land in Mexico, which will be part of a resort that will be developed someday,'' Schultz said. ``Right now, it ain't developed. . . . My personal feeling is that for $297, I could probably buy three lots of undeveloped land in Mexico.''