State ex rel. Miller v. Pace
Iowa Supreme Court
677 N.W.2d 761 (2004)
Pace (defendant) sold coin-operated payphones to investors with a sale-leaseback arrangement through management companies, telling investors their investments were safe, promised high returns, and that the management companies were fiscally strong, while never disclosing the actual risk, the unlikelihood of realizing the promised returns, or that the arrangement functioned as a Ponzi scheme sustained only by future payphone sales; the trial court found Pace's marketing and sales practices violated Iowa's Consumer Fraud Act.
Whether an individual in a consumer transaction commits consumer fraud by making misrepresentations or omissions intended to induce reliance, even absent intent to deceive or awareness of the falsity of the statements.