Businesses and Institutions
According to the Council of Better Business Bureaus, the most
aggressive scams against businesses include:
||Bogus Billing for Yellow Pages
||Questionable Advertising Specialty
||Fraudulent Telemarketing Offers
for Office Supplies
||Advance Fee Loan Brokers
||Phony Promotion/Prize Offers
||Fundraising Appeals from Fake Charities
and Nonprofit Organizations
A recent U.S. study indicates that nearly 29 percent of office
managers in businesses say their organizations have been targeted
by some form of mail fraud. Yet when asked what they would do if
they found that they had been victimized, only 29.5 percent of
businesses surveyed indicated they would contact the United States
Less than 10 percent said they would report it to a national consumer
protection organization. Interestingly, nearly 82 percent of businesses
indicate they never even ask companies to stop sending mail solicitations
for Yellow Pages advertising or any other product or service.
Businesses are often asked to support youth by paying for ads
in school yearbooks which are never published. Telemarketers also
call wishing to have you advertise your business on place mats,
calendars, etc. They say that time is urgent because only the last
few spots are still available. Usually the items are never produced
or of such limited distribution as to be worthless.
Ask how to reach the salesperson if you decide to advertise after
getting local business references who can vouch for their past
work. Then shop around for local comparisons. Insist on a written
detailed contract and refuse to pay up front, at least hold off
most until satisfied.
Sent in by Donald Miller 11 Oct 2001
I used to work for a company in Texas that sells advertising on
phone book covers and unauthorized high school sports schedules.
I once sold out the space on a phone book cover that was supposed
to have 3,000 copies printed for the target market of people aged
50 and over, then found out that they actually printed only 300
copies. When I confronted the general manager, I was told that
the home office had only shipped enough copies to our satellite
office location for "initial distribution".
It took a year for me to find out exactly what was truly going
on. They were selling schedules from high schools by first pretending
to be an independent scouting organization that worked for a lot
of smaller colleges, and then selling advertising on the posters.
They would then claim to be printing 3,000 copies of the posters,
but would usually only print up 300.
When I told head office about this, they said that they would
talk to the person involved, but it kept continuing. This company
still manages to sell advertising to people by pretending to be
associated with the high schools.
It still burns me to think that I had left an extremely reputable
company that produced high school sports program books and race
programs with contractual agreements to go to this company.
08/06 - Toronto police released the name of an alleged mastermind
in a multimillion-dollar advertising scam. After arresting a William
George Fisk, officials later identified the man as Michael Robert
Petreikis from the U.S..
Believed to have several aliases, Petreikis is accused of sending
fraudulent invoices to companies in the United States and Europe.
The invoices, which had a billing address in the Greater Toronto
Area, demanded payment for advertisement placements in business
People filed complaints with the Competition Bureau, Phonebusters
and the Better Business Bureau, saying they were being billed for
something they never requested.
Charged with fraud of more than $5,000, he is also wanted
in Minnesota for mail fraud and making false statements. Police
are continuing their investigation and said that further Criminal
Code and Competition Act charges will be laid.
The arrest was made by the Toronto Strategic Partnership that
includes the Toronto Police Service Fraud Squad, the OPP Anti-Rackets
division, Phonebusters, the RCMP-GTA Commercial Crime Section,
the Ministry of Government Services, the Competition Bureau, the
U.S. Postal Inspection Service, the Federal Trade Commission and
the U.K. Office of Fair Trading.
For a promotion, one company purchased travel coupons for $200
which were supposed to save its customers $800 in travel costs
for a trip. However, it turned out the travel agency didn't even
The Vanity Pitch
"Dear Business Executive" begins the letter. "You
are a potential candidate for a free listing in our next edition
of Who's Who in the Business World. Please accept our congratulations
for this coveted honor."
All too frequently, such pitches for "Who's Who" type
publications, biographies of successful people, or nominations
for awards or special memberships have a catch to them.
"Since inclusion can be considered recognition of your career
position and professionalism, each candidate is evaluated
in keeping with high standards and we think you may make an interesting
The executive who is flattered into providing the details of his
or her career may be stuck with a subscription fee, a charge for
the listing, or an inflated price for buying a publication that
does not receive the widespread distribution implied in the initial
offer. If they actually produce a directory they may only distribute
it to fellow advertisers and not to your potential customers.
Stop the European City Guide
Scam - bogus business directory with high-pressure payment
PLEASE TELL US A LITTLE ABOUT YOURSELF
I received, by post, a hand-written scam
letter from Nigeria with all of my details after only 6 months
from establishing a brand new company name and address.
The funny part is that the letter had my Canadian company name
on it with my United States address. The only time I had filled
out something with those particulars was on a form I received by
email months ago about a free international professional guild
Charles T. Miller Complimentary Listing # 7715
Daniel Ratté 05/21/02
Registering for Consumer Protection Affiliation
Businesspeople who wish to have their website given an accreditation
for fair business practices by paying to be evaluated in order
to get a seal of approval should be aware that such approvals and
the value of the registration are based solely on the organization
offering the service. The BBB has a reputable history and is recognized
by consumers as a leading force in this area.
Pat Kelley 08/10/02
Being Taken "Ad"vantage Of
You consider yourself a public-spirited business so when you get
a call to advertise in publications such as Area Drug Abuse, Child
Safety Guide and Fire Prevention Review, you see it as a meaningful
opportunity to support important causes in your community, such
as fighting crime and preventing drug abuse.
It doesn't hurt that you are also told the publications containing
your advertising will be widely distributed to local organizations
and specially targeted audiences within your community. When you
request time to think about it, one or more of the following events
||they phone you back and say that
an ad you agreed to place in their publication is printed and
needs to be paid for, even though you never agreed to an ad;
||they obtain the name of a person
at your business, and say that that person has previously authorized
||they send a collector every week
to your business who says that your business has approved an
ad and that it must be paid for;
||they send an envelope, Cash on
Delivery (C.O.D.), to your business. You or your staff pay
the COD and, upon opening the envelope, discover an invoice
for an ad in one of their publications that you never authorized.
You are so convinced that you, or a staff member, have
somehow pre-approved the ad that you pay them.
If you refuse to pay for unordered advertising, they threaten
to turn your bill over to a collection agency, or to take legal
action to collect payment. You are convinced by these threats and,
believing that your credit records may be adversely affected, pay
Using these tactics they get individual businesses to pay hundreds
and even thousands of dollars for advertising in their publications
using these methods.
Advertising scam for bogus publications
nets defendant 2 years
By Sara Eaton - The Journal Gazette
04/24/04 - U.S. District Judge William C. Lee sentenced a Fort
Wayne man to two years in prison Thursday for operating a phone
scam selling advertisements for non-existent publications during
a seven-year period.
Dean R. Thomas, who was 43 when he was indicted in October 2001,
pleaded guilty to one count of devising a scheme to obtain money
by means of fraudulent representations.
Seven other similar charges were dismissed as part of a plea agreement,
calling for Assistant U.S. Attorney David H. Miller to recommend
the low end of the sentencing range for Thomas.
Lee sentenced Thomas to two years in prison, three years on supervised
release and ordered him to pay a $100 special assessment fee, a
$5,000 fine and $95 restitution. Thomas was allowed to leave the
courtroom Thursday and will surrender himself to the Bureau of
Prisons on a selected date in the next 60 days.
Lee recommended Thomas be placed at a prison with educational
opportunities that is as close to Fort Wayne as possible.
The indictment alleges Thomas developed at least five publishing
companies, under which he was named as the sole stockholder, president,
director and secretary.
He then hired telephone solicitors to call individuals and businesses
to obtain advertisement purchases for the publications. Solicitors
promised the ads would appear in a certain publication, which never
existed, the indictment alleged. Solicitors would sell the ad to
one employee saying that another employee had already approved
Thomas began the phone scam in 1990 and continued through April
1997, according to the indictment.
Thomas, through his employees, also told businesses that he incurred
the cost of the publishing on the promise of payment from advertisers.
At least three businesses, one in Iowa, another in Illinois and
a third in Ohio, received collect-on-delivery packages with invoices
of advertisements never authorized by the recipients, the indictment
It was not clear how much money Thomas took.
( The sentence was just as criminal as the crime,
which likely netted millions.)
Damaged Goods Scam
The damaged goods scam that is all too familiar to the restaurant
industry, is often carried over to other businesses. The scam begins
with an individual calling or writing to your business falsely
claiming that a member of the staff has damaged his/her clothing,
automobile, jewelry, or other item. The scam artist encloses a
bill and requests reimbursement to repair the damaged item.
To avoid this scam, request the following information:
Ask the individual to list time, date, and location where the
damage occurred. Ask the individual to describe the staff member
responsible for damaging the items and be sure to examine the supposedly
Then, even if you feel a payment is justified, insist on gathering
their full ID info on the back of the cheque, "for insurance
Officers with the Kentucky Vehicle Enforcement are warning about
a recently reported phone scam in which someone impersonating an
officer calls businesses and tells them he/she is representing
a citizen whose vehicle was damaged by debris falling off of trucks
belonging to that particular business.
The person then requests payment for the damages the vehicle sustained.
A planned bankruptcy is basically a merchandising swindle based
on the abuse of credit. In this type of scheme, credit that has
been legitimately obtained is used to purchase inventory to sell,
or otherwise dispose of, at a pure profit. Meanwhile, the perpetrator
plans to defraud creditors by not paying the bill, loan, or other
form of credit, eventually filing for bankruptcy, either voluntarily
In a typical planned bankruptcy scheme, the perpetrator creates
a new business, opens a bank account, and leases operating space
to create a front of legitimacy. In some cases, a planned bankruptcy
operator will simply purchase, on a delayed payment basis, an existing
business with a favorable credit rating, thereby eliminating the
need to establish a credible business front.
Operators then begin to order merchandise. The bills for initial
purchases are either pre-paid or paid promptly to establish a favorable
The operators often invent credit histories and provide false
financial statements and trade references. The names, addresses
and phone numbers of the references are developed with relatives,
business associates and friends. The references are often other "bust-out" operators at work. As well, many of the references turn out to be "legitimate" merchants who are buying the defrauded goods from these bust-out operators.
Then the operators begin to purchase additional merchandise from
new suppliers, while beginning to slow payment to old suppliers.
Eventually, increasingly large orders are placed with all suppliers.
The increased inventory is then quickly sold, often below cost.
Once the perpetrator receives payment for the sold, but unpaid
for, merchandise, he or she either absconds with the profits or
files for bankruptcy.
The individual creditor ends up just writing it off as a bad debt,
rarely pursuing the claim past the "no assets" statement
filed with the bankruptcy court.
Cons often use trade shows to target many companies simultaneously
and place multiple orders. This way they avoid prosecution under
the U.S. federal mail and wire fraud statutes, since they don't
use the mail or telephone lines to transmit the fraudulent information.
Long Firm Fraud and Illegal Trading
Businesses should watch out for:
||companies that have established
credit over a period of time with small orders and then use
the excuse of expansion to justify huge increases in ordering;
||trade references that include comments
such as "acquainted with management," since these
references are often co-conspirators in the scam;
||answering services that ask if
the trade reference can call back or a reference that gives
an immediate glowing report without looking into records. When
you receive a return call, ask if you can call back; if you
are given the service number again, ask for the number at the
current location, saying that you will call back shortly;
||credit reference that uses a post
office box, or references in the same city or area as the applicant;
a reference with no business telephone listing or with a telephone
number but no address. Verify listings with reverse lookup
services such as www.555-1212.com.
Closing Out Sale
In one planned insolvency the object was to enrich themselves
by using a wholesale tool distributor to obtain merchandise on
credit fraudulently; retain the merchandise and proceeds from the
sale of the merchandise for their personal benefit; and render
the business intentionally insolvent and unable to pay those companies
supplying merchandise to the corporation.
In this type of scheme, known as a "bust-out" fraud,
persons purport to sell a legitimate company to a "strawman" while
retaining a hidden interest. They had the strawman dramatically
increase the company's credit purchases using fraudulent credit
references, and then sold the merchandise "off the corporate
books" for the benefit of the hidden owners, leaving the corporation
insolvent and its creditors intentionally unpaid.
Using the company as a front they ordered in excess of $2.5 million
worth of merchandise on credit with the intention of converting
it to cash for their personal use without ever paying for it.
Bankruptcy Fraud - link
Commonly Targeted Victims
Merchandisers, lenders, and others who extend credit for
the purchase of goods and services (such as print and ad
vendors, office equipment suppliers, etc.) and business owners
who sell their businesses (and good credit rating) to con
artists, then fail to get paid for the business.
A U.K.-based group that is defrauding businesses in Canada and
the U.S. targets office supply companies and computer distributors
by placing orders by phone or fax. The most common products ordered
have been Intel Pentium processors and ink cartridges.
They pay for the orders using fraudulent credit card numbers;
sometimes requesting that the order be equally divided and billed
to several credit cards in order to escape minimum card verification
At least thirty U.S. furniture dealers in three states have fallen
victim to schemers who deliberately place orders with companies
who promise to ship merchandise within 24 to 48 hours. A Mr. Green
orders office furniture and gives a credit card number from Midland
Bank in London as payment. The individual later places two more
orders. The con artists then cancel the orders, but by that time,
the merchandise has been shipped and lost.
A New Record For Fraud
A man has pled guilty to an information charging him with fraudulently
obtaining more than 26,000 audio compact discs, valued at about
$425,000, from two mail order companies. Under an information,
a defendant waives the right to have his case presented to a federal
grand jury and, instead, pleads guilty to charges presented by
Over a five year period he opened 2,417 customer accounts—each
in a different false name—at BMG Music Services and Columbia
House Music Club. By taking advantage of offers for new customers,
which typically provide nine free music CDs with the purchase of
one at regular prices, he received through the mail 26,554 CDs,
valued at about $425,000. He later sold them to vendors at flea
He rented sixteen boxes at post offices to receive the CDs and
knowing that he would avoid fraud-detection thresholds as long
as none of the addresses was identical, he slightly altered letters,
numbers, punctuation marks and spaces in the addresses. For example,
he created hundreds of variations of his home address by deliberately
adding fictitious apartment numbers, creating the impression that
his single-family home was an apartment complex.
He faces a maximum sentence of five years in prison and a $250,000
fine, and may be ordered to pay restitution and costs of prosecution.
In an similar earlier case, the accused pled guilty to fraudulently
obtaining 22,260 music CDs, valued at $350,000, from BMG and Columbia
House by using 1,630 false names to establish fake accounts, and
was sentenced to a year in prison. He as well deliberately added
fictitious apartment numbers and suite numbers, and inserted unnecessary
directional abbreviations and extra punctuation marks and spaces
to post office addresses.
Five Letters Worth a Thousand Pictures
A recently resurfaced scam involving online auction winners of
a digital camera indicates the scam artist likely has access to
a huge database of credit card numbers and has found a way to outsmart
credit card companies’ anti-fraud measures.
The original scam worked like this: An online auction bidder wins
an auction for a digital camera, almost always a Sony Mavica. The
scam artist sends an e-mail to the winner offering him or her a
chance to evaluate the merchandise for a few days without paying
for it —all the scamster wants is a mailing address. If the
winner likes the camera, only then they are asked to wire money.
But the scam artist doesn’t own the camera that’s
just been sold. Instead, it’s ordered with a stolen credit
card from an electronics store and delivered to the mailing address
provided by the winner. So if the winner wires the money, they
now appear to have stolen the camera. The victim has lost the money
and faces charges, the store has given away a camera it hasn’t
been paid for and must seek to recover, and the scam artist walks
away with hundreds of dollars and no trace of the money transfer
which is usually wired to a bank in Latvia.
The original scam had one drawback — most U.S. retailers
now employ a simple fraud-screening tactic called AVS —address
verification service which compares the credit card billing address
to the merchandise shipping address, and if they don’t match,
raises an alarm bell.
But the new scam is designed to get around this system by making
sure the two victims —the credit card victim and the auction
victim share the same ZIP code. He has figured out that AVS systems
generally only check the ZIP code and the first five digits of
a mailing address. So in a flurry of recent orders to a New York
City electronics retailer, the scamster filled out shipping address
forms with a bogus first line that included only the first five
characters of the credit card victim’s real billing address.
The rest of the shipping address, including ZIP code, belonged
to the auction victim. This gave an awkward appearance to shipping
labels but generally didn’t interfere with delivery or raise
What’s most alarming about the updated routine is the idea
that the scam artist apparently has access to so many stolen credit
cards and their account info that they can find one to match the
ZIP code of any winner.
All someone needs to make unauthorized calls using your calling
card is the numbers, not the actual card. Number thieves hang around
airports, hotels and other locations where long distance travelers,
especially business people, congregate. They will use binoculars
or less obvious zoom lens cameras as well as close proximity to
observe while you input your codes manually or verbally. Try to
shield the numbers dialed or speak softly if reciting numbers to
the operator so as to hamper their efforts.
see also main Chapter
One group states that as a business donor your charitable contribution
will be acknowledged with an ad in a yearbook or other publication
which will be distributed to local law enforcement officers, local
fire fighters, or local businesses.
Should you consent, or even hesitate, they will send you a package
via UPS, demanding payment of the amount of the donation in exchange
for delivery of the package. This package contains decals, a tax
receipt, a brochure, and in some cases a return envelope for your
business card, to supposedly be used in the acknowledgment ad.
Slamming - see main Chapter
Fax Cramming -
see also main Chapter
Crooks will take advantage of your perception that fax transmissions
are inexpensive by inducing you to call fax numbers which are billable
at high rates.
One version of this scam is to send requests to a company asking
for information, which usually require pages and pages to be faxed
back - again at a premium rate cost.
In the U.K. the fax-back operators make a large part of their
estimated £28m annual turnover from hotels and restaurants,
which are asked to send menu and booking information on £1-a-minute
lines, and unsolicited offers of sport and concert tickets to any
corporate fax number they can get hold of.
A perfect example is a couple phoning up a hotel, saying they
are getting married and asking for information to be faxed to them.
What the happy couple forget to add is that the line is an 090
premium rate number and, oh, they don't actually have any intention
of getting married.
Another example is a make-believe company phoning an estate agent,
saying it is planning on relocating to the area and asking for
its property lists to be faxed. Larger estate agents have tens,
if not hundreds, of properties on their books, and run up big phone
bills fulfilling these requests.
Fit To Kill Afterwards
Hot on the heels of the latest high-school shootings you get a
fax from the "National Gun Control Poll" which asks: "Would
you like to see more effective gun control laws?" You can "vote" by
faxing your reply to one of two 900 numbers. The total time to
fax a reply is not disclosed, nor is the $2.95 a minute billing
"We are faxing out over 3 million voting forms throughout
the country," the fax states, with claims that results will
be reported to U.S. officials. However the "poll" is
not from an independent research group or government agency, but
from a for-profit business called 21st Century Fax Ltd.
in London, England. The company's Web site shows that they also
sell information on exercise and weight loss tips like the "Yummy
Yum Yum Diet."
9021 Oh My Phone Bill!
am general manager in a gallery which is candle...Specially Scented, aromatic candles (cinnamon, vanilla, lilac) liked
to much. We have 25.000 customers in a year. We want
to buy 10.000 different candles. We hope to do good
business with you. But, We need your print catalogs,
wholesale pricelist and only one sample for our customers
review. We look forward to your information.
Fax : +902122769639
E-35 BLOK, DAIRE: 12
SARIYER, ISTANBUL, 80900
Whatever You Have
Your business gets a request for detailed information on your
products, services and prices but the return address is only a
fax number. You transmit enough material to warrant the expressed,
immediate and profitable interest.
The number turns out to be an international long distance call
or pay-per-call number resulting in expensive charges. The scammer,
who never had any intention of doing business with your firm, shares
a portion of your charges with the foreign phone company. If you
notice this charge when you check your billings, your phone company
may reverse it on a one time basis.
You get a call from a company offering you a free, 30-day web
site including web design and hosting services to help expand your
small business. They say you can continue the service for a nominal
fee, say $25 or $30 a month, and cancel at any time.
Some service providers state that you'll be billed automatically
after the 30-day period; others claim you won't be billed after
the 30 days unless you tell them you want to continue the service.
The provider says that your free web site will be up and running
within a week, and that you'll receive a welcome package, which
may include a printed copy of the web site, instructions for accessing
the site, and a phone number to call to make changes or cancel
Before or after explaining the offer, the provider asks for basic
information about your company: the address, contact person, business
hours and a brief description of the business. If you refuse to
accept the free offer, but agree to receive an information package,
you are still charged for the "free" trial.
Even though you were told that no charges will be incurred unless
you ordered the web site on a permanent basis and approved future
charges, you may be billed repeatedly, month after month. In fact,
unscrupulous service providers bill you, whether you authorize
the services or tell the provider that you want to cancel. Also,
many of the services have little value.
That's because these providers design and host sites that contain
limited information about the business, include misinformation
or misspellings, and lack important features. Moreover, most of
the sites are not listed with major search engines. If customers
can't find your site, it's worthless to your bottom line. In addition,
you probably won't see the welcome package, but you will see the
bill - either on your phone bill or as a direct invoice. Unless
you review your monthly phone bills or invoices carefully you could
end up paying unauthorized charges for months before you notice
"Internet cramming has focused on small businesses like a
laser," said Jodie Bernstein, Director of the FTC's Bureau
of Consumer Protection. "Thousands of small businesses have
been ambushed by Internet crammers and it has cost that community
millions of dollars in less than two years.
These operations rely on the fact that small businesses, in particular,
may not have the rigorous ordering, accounting and bookkeeping
procedures that larger businesses have put in place."
To avoid problems, avoid negative option services, get a full
written contract and pay in stages of completion.
TO: All Corporate Employees
FROM:Diane Johnson, Corporate Travel Division
BAHAMAS CRUISE AND ISLAND VACATION ONLY $79.99 PP
FIRST 50 CALLERS
This fax, sent to many departments in large companies, implied
it was inter-company sent and sponsored. It lured many people to
respond to the scams presented in the Vacation Section of this
One company played on fear of the government by sending out unsolicited
faxes and direct mail in an attempt to sell their grossly overpriced
posters used for displaying government regulations to employees.
These contained information which must be posted in offices stating
the correct minimum wage and other state and federal requirements.
Such companies use scare tactics such as, "if your company
does not display this compliance poster, it will face a fine of
$7,500 and be put on a "hot list"." Another scare
tactic is the claim that they have insurance against errors in
The truth is that if you have one of the "free", government-issued
posters you will not be fined for any such errors and regulators
are happy to provide assistance for related concerns.
Your switchboard secretary receives a phone call from an individual
claiming to be a phone company service technician. The technician
says he is testing phone lines and that she needs to press 90,
then the pound (#) key and hang up to complete the test.
She obliges and later you find that by pressing 90#, you may give
the caller full access to your commercial PBX telephone line, including
having long distance calls billed to your number, if your PBX system
AT&T says this scam has apparently been traced to many local
prisons. Check with your service people about deterrents and have
a policy in place for usage of this feature.
Just like the seniors, business people are regularly taken in
by the phrase "You've just won one of five great prizes!" "All
you have to do is buy some promotional items." Sadly, the
items are shoddy and overpriced and the prizes are cheap, over-hyped
The employees of Finer Images would tell business owners that
they were eligible for valuable prizes, such as cars, cash, a home
entertainment center, and/or jewelry. To claim your prize (or prizes),
you were told you needed to buy advertising specialties, such as
pens, T-shirts, and key chains, which proudly displayed your business
name, address, and phone number.
These purchases were said to both eliminate gift taxes by making
the fabulous prize a promotional award rather than a gift and provide
you with a business deduction. If you ordered once, you were subjected
to additional high-pressure sales pitches, with promises of even
more valuable prizes.
An employee of one boiler room testified that no customers had
any chance of receiving the valuable grand prizes of cars and cash.
The evidence presented at trial showed that they awarded only inexpensive
watches or jewelry. Although they claimed these prizes were worth
over $1000 apiece, the wholesale value was actually $38-49 for
each bracelet and $69 for each watch.
Two Montreal-based telemarketers that sell listings in business-to-business
directories, W.W.S. World Wide Source Publishing, Inc. and Ameri-Source
Publications, Inc. will together pay a total of $125,000
in penalties in fees and costs to the State of Vermont and provide
refunds to all of their Vermont customers in a settlement with
the Vermont Attorney General.
An 11/01 lawsuit alleged that WWS, using a Vermont return address
but calling from Canada, solicited orders for two-year listings
in its "American Business Index" business directory for
$399.95 but violated the Consumer Fraud Act by:
that the company offers renewals of listings in the local
Yellow Pages, when in fact it offers primarily new listings
in a non-local directory of limited circulation.
the circulation of the directory as 1 million, when in fact
it is closer to 35,000.
WWS’ location by using local Vermont addresses in all
many customers without their authorization.
to provide customers with their legally-required three-day
right to cancel.
customers for a directory that is of limited value to most
Over 100 of those customers complained to the State of Vermont.
Ameri-Source, a company which shares common management and ownership
with WWS and uses a return address in New York State, also telemarkets
listings in a business-to-business directory.
Although they have denied any wrongdoing, WWS, Ameri-Source and
their President, Pavlos Angelatos, are barred
from doing business in or into Vermont, or using a business address
or facilities in the state.
Out-of-state customers of WWS will have until September 30, 2002,
to send a written complaint to the Attorney General’s Consumer
Assistance Program (CAP) at Morrill Hall, UVM, Burlington, VT 05405,
and receive a refund.
A Moody Con Man
Back in 1999 I was at the NY Food & Restaurant show with a
vending & amusement distributor I worked for. A guy walks up
to the booth and we strike up a conversation. He calls me the following
week at my office and we arrange to meet in a hotel lobby in Manhattan.
He tells me that he has an "in" with the Chinese government
and is exporting containers of high-end liquor to China. His wife
wants him to go into semi-retirement and he needs a partner to
manage everything in exchange for 10% of all profits.
I thought it was too good to be true, but since I was meeting
him on company time I decided to go along and see where it was
We met again a week or two later in the same hotel lobby. He brought
some authentic looking letters and purchase orders from China and
a catalog of the different liquors they purchase.
He also told me an interesting story about a trip to Africa many
years prior where he made a deal to export mood rings because the
natives thought they had magical properties and they all wanted
In the end he asked me for $5,000 as a sign of commitment to the
partnership. I told him to give me a letter of intent and then
a contract I can have my attorney review. He became very nasty,
I guess in order to get off that subject. Needless to say I never
gave him any money.
Jerry Hocek 04/10/02
"Husband And Wife Teams Cheated Russian Businessmen
Two couples, one Russian and one British, induced some 700 businesses
in the former Soviet Union to pay travelling and accommodation costs
for senior personnel to attend non-existent management seminars in California
in the summer of 1996.
On various dates in January and February 1998 S.K. and her husband I.F. and Michael and Maria Newman (aka Mikhail Butkov) pleaded guilty at Isleworth Crown Court, Middlesex, to their parts in a £1.5 million fraud on Russian
businessmen. They put a lot of time and money into setting up the fraud,
purchasing the Bermudan off-the-shelf company "Investco Corporation" with
the sole aim of using it to commit the fraud. Many thousands of glossy
Russian language brochures printed in Reading were used to entice businesses
in the Ukraine and Russia to part with their money.
The brochures told lies about who would give the seminars. The people
did not exist and the organisations they were said to belong to (some
of them renowned educational institutions such as Yale University) had
never heard of Investco or the planned courses.
In response to the brochures, Russian businesses sent money to Investco
accounts in London, Jersey and Geneva and to the UK account of a Reading-based
company owned by the Newmans called Lincoln Marketing Ltd.
Correspondence from the victims was directed to mail drop addresses in
California, Luxembourg and Belgium from where it was forwarded to mail
drop addresses in Reading and London.
K and F operated only from mail drop addresses and
used only mobile telephones.This made finding them difficult. They were
eventually caught when they were stopped in the City of London driving
a car which was known to be of interest to the Thames Valley Police.
When caught K and F were in the process of laundering
the proceeds of the fraud via accounts in Guernsey into accounts in Andorra
where they were planning to live. F was the first SFO defendant
to be prosecuted on a specific money-laundering charge. He pleaded guilty.
K (F's wife), who was the principal organiser of the
fraud, pleaded guilty to conspiracy to defraud.
During the early stages of the investigation the Newmans went to live
in Spain. Michael Newman was arrested in August 1997 while visiting Switzerland.
He was extradited from Switzerland in September 1997.
He pleaded guilty to furnishing false information for accounting purposes.
His wife, Maria, returned voluntarily to the UK from Spain after her
husband's extradition. She admitted to helping in the preparation and
mailing of documents.
This case arose out of an investigation with the Thames Valley Police.
On 3 April 1998, I.F. and Michael Newman were sentenced to
three years' imprisonment. S.K. was jailed for two years.
Maria Newman was sentenced to eighteen months' imprisonment, although,
after the year end, this was reduced on appeal to a suspended sentence
of nine months. Also after the year end, on 30 April 1998, almost £1.2
million was confiscated from the defendants with a view to reimbursing
(Editor note: Russian couple in England requested removal of names on assurance of repentance.)
Follow the links at the bottom or top for more business-focused
scams such as supplies, loans, and Nigerian money-sharing offers.
The San Antonio,
Texas Police Department has a great listing of current scams
affecting businesses in that area.
Marketplace for International Trade Services - Knowledge and service resource directory for businesses.
Articles on scammers targeting businesses.