Model 1 Inc., the controversial Fairfax County model-search firm, has virtually shut down its operations in the face of a continuing Federal Trade Commission probe of its high-pressured recruiting tactics.
The year-old Tysons Corner company, whose scouts have lured thousands of prospects in the Washington-Baltimore area to the firm by telling them they had "the look" to be models, ended its recruiting operations on July 13 and laid off almost all of its staff--about 50 people. The firm, however, said it plans over the next six months to continue to honor the contracts it has with would-be models who have already paid for their training classes.
David T. Ralston Jr., a Model 1 attorney, said that beyond honoring those contracts, the firm "will not be doing any training of actors or models."
The near-closure came after several months of consumer complaints and government scrutiny. In May, a preliminary federal court order forced Model 1 and two companion firms to sharply curb the sales pitches they were making to people for training classes that cost up to $1,600. Then earlier this month, the FTC accused Model 1 of being in civil contempt by "flagrantly violating" that order.
Jason Hoffman, Model 1's president, did not return repeated calls for comment about the firm's virtual shutdown. Earlier this year, in response to a Washington Post investigation of his firm, Hoffman said, "I am very proud of my company's record."
In the latest allegations, the FTC accused Model 1, Hoffman, Creative Talent Management Inc., an all-but-dormant talent-search company, and its president, Ralph Bell, of using "a brazen sales approach--the 'screen test' audition." The sales pitch invited consumers to try out for roles as extras in movies starring John Travolta, Keanu Reeves and Tom Cruise.
In one instance, the federal watchdog agency said a teenage girl and five of her friends were approached by a talent scout who asked them if they were "interested in being in a movie with John Travolta about gas-breathing aliens."
But the FTC alleged that the screen tests were actually "a slick ruse designed to mask the company's true objective to lure hundreds of unwary consumers into Model 1's training program."
Model 1, Creative Talent and their executives settled the contempt case by agreeing to offer to rescind all contracts that the would-be actors had signed and refund their money. The FTC said it does not know how many consumers had signed up for the training.
Meanwhile, Scott Bryant, a Model 1 photographer, said that on the Fourth of July he used his keys to the firm's offices at 8150 Leesburg Pike to retrieve more than 500 photographs as well as photographic equipment. Bryant claims the firm owes him more than $63,000 for his work.
He said the model trainees need the photos to get work, but "I'm just a vendor who wants to be paid for his services."
Model 1, however, viewed the action as a theft and called Fairfax County police. Hoffman also sent a letter to its clients who were left without the photos they had already paid for.
Hoffman wrote that police "have a primary suspect."
Fairfax Detective Jim Crabbe said he's not sure about the outcome of the case. "I'm trying to see whether there was a criminal act or it's a civil matter," he said.
In the face of the FTC action and the case of the missing photos, Hoffman told Model 1 employees at a July 13 meeting that the firm "could not survive," according to one talent-scout manager who was there and was laid off after receiving only $600 to $700 for the seven weeks he worked there. "He blamed the FTC for being too stringent and non-pliable," the manager recalled Hoffman saying. "As a business, if you can't sell a good, you can't stay open."
The man, who has a wife and four children to support, said he had sold two liquor stores in Carroll County to join Model 1. He said he was "disappointed but not surprised" by the closure. He declined to be identified because he had pledged, like other Model 1 employees, to not discuss the firm's operations with outsiders.