Prosecutors have said Transcontinental Warranty Inc., with Cowart as its president and Sagnelli as vice president, ran the scheme starting in June 2007. A federal judge ordered that the company halt the use of deceptive "robo-dialer" telemarketing calls telling people their auto warranties were expiring and offering to sell them new service plans.
That injunction followed a successful lawsuit against Transcontinental and another company by the Federal Trade Commission to halt as many as 1 billion automated, random, prerecorded calls about auto-service warranties.
Cowart and Sagnelli, who currently are free on bond, each face up to five years in federal prison and as much as $250,000 in fines. Both could face an additional five years behind bars because the crime also involved telemarketing.
Update: On 8/31/2011 the FTC issued a press release stating that they were going to be refunding more than $3million to consumers who were tricked into purchasing extended service contracts by robo calls from this company. The FTC Press Release can be found HERE.