Snellville councilman Mike Smith charged in scam

Snellville's mayor pro tem and three others face felony charges for allegedly selling $1.8 million in bogus credit card packages.

Mike Smith, 33, a Snellville city councilman, was arrested Thursday night and charged with prohibited telemarketing, a felony.

If convicted, Smith would face one to 10 years in prison for each of 10 counts, Gwinnett District Attorney Danny Porter said Friday.

Smith and three others, whom Porter identified as John Schopp, Heather Cushing and Smith's brother, Stephen, are listed as co-defendants.

Porter said they were partners in a company that pocketed $1.8 million.

Mike Smith, freed Friday on $25,000 bond, could not be reached for comment. But Smith's lawyer, Michael Syrop, said Smith's involvement with the company was limited to helping launch and organize the business.

"I think that when all the facts are all put together, it will be shown that he absolutely did nothing wrong and violated no laws," Syrop said.

Under Georgia law, Smith's indictment could result in his suspension from office. That decision rests with the governor. If convicted, Smith would be removed from the council.

Smith's arrest is the latest bombshell in Snellville, which is known for its vitriolic politics. But Porter said the case is unrelated to city government.

"That's kind of hard to give any credit to, given the fact that the Governor's Office of Consumer Affairs turned it over to us," Porter said.

Porter said he wasn't even aware Smith was a Snellville city councilman until he got a call from Gwinnett Sheriff Butch Conway.

" 'Did you know you had a city councilman in jail?' " Porter quoted Conway as asking.

Smith was overwhelmingly re-elected in November to the Post 5 seat on the Snellville City Council. He was appointed mayor pro tem, a ceremonial second in command, in January 2005.

Smith, who is married with two children, is a businessman.

According to Porter and Bill Cloud, a spokesman for the Office of Consumer Affairs, the four ran a Norcross company called Global Financial Inc. from November 2002 to July 2003.

Through telemarketers, the company sold a MasterCard membership package that pitched a credit card that was interest and deposit free.

After buyers provided bank account information, Porter said the suspects would "debit people's accounts for the cost of the membership package, and the membership package would never arrive."

According to the consumer affairs office, Global Financial provided the consumers' information to a company called Global Fulfillment, which randomly shipped membership benefit packages. They included promises of $500 in grocery coupons, $100 in gas rebates, free satellite dishes and long distance service, among other things. The packages included a login name and password to access the benefits, but the passwords were invalid and access was not granted.

Global Financial used a telemarketing call center in Minot, N.D., to make the calls but never paid for the services, Cloud said.

Porter said hundreds of consumers called the consumer affairs office to complain, and the office eventually turned the matter over to Gwinnett County. Porter said his office located five victims.

Incorporation records filed with the state list Stephen Smith as CEO and secretary of Global Financial and Schopp as chief financial officer. Mike Smith's name is not included in those records.

Attorney Syrop chastised Porter for not telling Smith, or anybody else, that the councilman had been indicted a month ago — or that he would be arrested.

Syrop added that Smith was "confused and very scared" when officers arrived at his home to arrest him.

"He had no idea he had done anything illegal," Syrop said.

Snellville Mayor Jerry Oberholtzer said he was very surprised to hear of Smith's arrest.

"It's a shock," he said. "Even though he is a political opponent, I wouldn't wish this on anybody. My heart goes out to the family."

Councilman Robert Jenkins, a Smith ally, pledged to stand by his colleague.

"I support Mike 150 percent and will do everything I can to support him and encourage him and get him by this," he said.

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