Why Did CDG Shut Down? ‘Telemarketers’ on HBO Exposes Billion-Dollar Scam

HBO’s new three-part docuseries Telemarketers premiered Sunday, August 13 with an explosive look at Civic Development Group (CDG), a New Jersey-based call center that falsely acted “on behalf of local police and fire departments” to scam people into making monetary donations.

The series is directed by Adam Bhala Lough and Sam Lipman-Stern, the latter of whom is a former CDG employee who filmed questionable day-to-day occurrences at work, with the reassurance of his all-star colleague Pat Pespas.

The creative team continues with the Safdie brothers, Benny Safdie and Josh Safdie, who executive produce alongside Dani Bernfeld, Danny McBride, David Gordon Green, and Jody Hill. 

At times, Telemarketers feels like a dark workplace comedy, but its overall mission is something much greater. Over the course of three hours, the documentarians set out to expose the dark underground of the American telemarketing industry, which began with CDG.

By the end of the first episode, it was revealed that CDG had been shut down for its shady practices, though many of the employees don’t think the consequences were enough. What exactly went down between CDG and the Federal Trade Commission? Continue reading for everything you need to know about the company’s downfall.

What Happened to CDG? Why Did the Company Shut Down?

The Federal Trade Commission – a government agency that enforces federal consumer protection laws to prevent fraud – sued CDG for misleading donors by telling them that they were donating directly to charities serving police, firefighters, and veterans. 

On multiple occasions, the company told donors that the aforementioned agencies would receive 100% of the funds being raised when in reality, they only received 10-15%.

According to a document released by the FTC, the agency first sued CDG in 1998 for “falsely claiming that their donations would be used locally to buy bullet-proof vests and provide death benefits for deceased officers’ surviving family members.” Later, in 2007, the Department of Justice filed another complaint alleging that the defendants had violated the prior FTC order by referring to themselves as “consultants” who were operating independently from CDG.

In 2010, the lawsuit concluded and the CDG was banned from soliciting donations, and owners Scott Pasch and David Keezer were made to pay $18.8 million for violating the FTC order. As depicted in Telemarketers, Pasch and Keezer turned over a $2 million mansion, artwork by Picasso and Van Gogh (valued at $1.4 million), a guitar collection, jewelry, three Mercedes, two Bentleys, a Range Rover, a Cadillac Escalade, among other assets. At the time, it was considered the largest-ever civil penalty in an FTC consumer protection case.

No criminal charges have been filed against Pasch and Keezer, and the two were not sentenced to any jail time. 

Giving a voice to the CDG employees, the docuseries asked interview subjects about their reactions to the shutdown. One recalled feeling shocked because “there were always rumors” about the company shutting down. However, they were never brought to fruition. He was informed via a phone call from HR on December 2, 2009 telling him that the office was shutting down immediately. He said his first thought was, “But we’re doing good! What are you talking about?”

The employee was enraged after finding out the depths of the telemarketing scheme. “They told me this cat had a fucking house on both ends of the lake… They said he had to liquidate all his artwork. And I’m begging old ladies for $10 donations? Get the fuck out of here.”

Pespas, who often made record-breaking sales for the company, reflected on the lawsuit and expressed dissatisfaction with the meager fine from FTC. “This was nothing but a cash cow. This was a pass in a geezer’s personal checkbook. ‘Oh please donate to me, I need a new Corvette.’ They couldn’t share. They couldn’t live with 90% of the money. They wanted 100% of the money and then to lie to you about where it’s going. You think that fine meant anything? It meant nothing,” he shared.

Pespa went on to reveal that Pasch had a band that “sucked” called J. Henry, which he recalled seeing infomercials for. “Can you imagine you’re an old lady and you donate money thinking it’s going to the cops down the street, and these clowns take that money and just make shitty records with it. The thing I don’t understand is how they got away with it without going to jail,” said the former CDG employee. 

He concluded, “If I ripped off all that money in the name of the police, I’d be in jail. But these guys… I guess what they say is true: If you got money in this country, you don’t have to worry about a thing.”

Telemarketers Episode 1 is currently streaming on Max. The remaining two episodes will premiere on August 20 and August 27, respectively, at 10 p.m. on HBO and Max.