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Free grant was scam too good to be true

Kathie Borg reviews the slick package of paperwork she was faxed by a company calling itself National Financial Advisors Inc. The Enterprise could not find any evidence of incorporation. The company has been targeted by Web sites as a scam. (Sarah Smith / Enterprise)

When Kathie Borg heard the pre-recorded voice on her phone, her instincts to hang up didn't kick in.

She listened.

She punched the phone button for the number to speak to a representative. She truly believed she and her business partner Leo Hensel were being thrown a lifeline.

The offer? Free grants to small businesses.

The owners of Park Rapids Seed House, Inc., have been looking to diversify their business, to offer a line of organic products, something customers are asking for. Traditional lenders are being overly cautious about giving out business loans in troubled times, so a grant seemed to be the solution.

A "grant research specialist" quickly contacted Kathie after the initial inquiry.

Game on.

Kathie and Leo were told by an organization called "National Financial Advisors" they qualified for a business grant of $136,000. They were faxed a slick set of documents about the company's wonderful works on behalf on small businesses, locating free grant money for a nominal finder's fee.

They wanted Kathie to send them nearly $3,000 for "processing fees" within a week or risk losing the funds. She had balked at turning over sensitive financial information.

Leo's radar went up. He told her it was a scam. She grudgingly began to believe him.

"They wanted $2,995 to process the grant and a balance of $6,000," she said. "They told me it would take six to nine months to receive the grant."

That seemed an awfully long time, when National Financial, based in Henderson, Nev., only needed five days to approve the grant request.

Kathie luckily didn't have that kind of money sitting around. She didn't send them the funds.

Her disappointment at not getting the grant was quickly replaced by anger.

"I work 18 hours a day at two jobs," she said.

When a company representative contacted her when she didn't send the funds, she was armed with information she was provided off the Internet confirming her worst fears: National Financial Advisors, Inc., is a huge scam.

She recited the information to the woman on the phone. The representative hung up.

"I wanted to tell her how sleazy of a person she was for doing this to me," Kathie said.

Numerous calls to "grant research specialist" John Goldberg went unreturned, as did calls to the Nevada Attorney General's Consumer fraud Division.

"Send us an e-mail," said that office. "File your complaint online."

Pre-recorded calls such as the type Borg received are generally illegal, so they should be reported to this Web site:

Kathie will report the scam to local authorities. Meanwhile, she wanted other business owners to be aware that offers out there designed to help small business owners may be too good to believe.

The scam alert said National Financial usually packs up its offices, "re-incorporates" and sets up shop somewhere else when the heat is on.

Sheriff Frank Homer said he's saddened that business owners who may be struggling are falling prey to such scams.