First Choice Tele-Services Corp
Advance Fee Credit Card Offer Scam
08/06 - NEW YORK, (Reuters) - A former HSBC Bank USA vice
president pleaded guilty in Manhattan federal court to a conspiracy
charge over his role in a $30 million telemarketing fraud targeting
low-income people with poor credit histories, U.S. Attorney Michael
Garcia said.
Raymond Payne, a 35-year-old Brooklyn, New York resident, admitted
to one count of conspiracy to commit wire fraud and mail fraud for
helping a Montreal, Canada "boiler room" operation defraud
100,000 U.S. residents, Garcia said.
The conspiracy charge carries a maximum 20-year prison sentence
and maximum fine of $250,000 or twice the illicit gains. Payne was
arrested in 2005.
According to the indictment, Payne was the relationship manager
on an account at HSBC Bank in Manhattan for telemarketer First Choice
Tele-Services Corp.
Prosecutors said First Choice representatives would cold-call people
and offer to sell them "guaranteed" credit cards for $249
to $299 each, provided they disclosed their bank account information.
Though some people did receive manuals on credit repair, none received
credit cards.
First Choice, run by Canadian co-defendants Stephen Clark and Leslie
Pinsky, extracted $30 million from people, and transferred the money
to the HSBC account, prosecutors said.
Payne hid the scheme from his superiors and furthered it by selling
the credit manuals to First Choice, prosecutors said. Payne admitted
that he became aware of the fraud in April 2003 when Pinsky told
him in a recorded phone call that the telemarketers were "lying
through their teeth" during their cold calls.
Authorities have ordered Pinsky to surrender pursuant to an extradition
request, Garcia said.
09/06 - NEW YORK (Reuters) - An accused ringleader of a $30 million
Montreal-based telemarketing scam that targeted poor Americans with
weak credit histories pleaded guilty in New York to fraud and money-laundering
charges.
Stephen Clark, 47, admitted to one count of conspiracy to commit
wire fraud and mail fraud and one count of conspiring to launder
money.
Prosecutors said Clark and Leslie Pinsky, both Canadian citizens,
operated First Choice Tele-Services Corp., a "boiler room" operation
that bilked 100,000 people by extracting $249 to $299 fees in exchange
for "guaranteed" credit cards from February 2002 to October
2003
Though some people did receive manuals on credit repair, none received
credit cards, prosecutors said.
Clark told the judge that First Choice telephone representatives "offered
a credit card which people didn't receive." He said the company
had no intention of providing the cards. Clark also admitted to laundering
the fees through an account at HSBC Bank USA, a unit of Britain's
HSBC Holdings, and into other accounts.
Prosecutors and Clark have agreed on a prison sentence of between
11-1/4 to 14 years. The defendant had faced up to 20 years in prison
plus fines on each of the two counts. Formal sentencing is set for
January.
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