Recovery Scam Telemarketing
Fraud Operations Scams
People who have lost money through prize promotions, merchandise
sales, and charity drives are often placed, as mentioned, on "sucker
lists". These lists contain names, addresses, phone numbers,
and other information, such as how much money you have spent responding
to telemarketing solicitations. Sucker lists are bought and sold
by unscrupulous promoters who know that anyone who has been deceived
once is vulnerable to additional scams.
"Recovery rooms" prey on such persons who have already
been victimized by telemarketers but will no longer respond to the
typical offer, finally realizing they have been duped.
The pitch typically used by recovery room telemarketers makes reference
to the consumer's prior victimization, sympathetically warns them
not to fall for unscrupulous telemarketing schemes again and then
falsely promises that, for a fee, a percentage, or a donation to
a "specified" charity, they can help you obtain the promised
prize or money lost in a previous scam.
In fact, the recovery room is simply defrauding consumers one more
time and will not engage in any such “recovery” efforts
on their behalf.
We Can Help
One group, the Fraudulent Action Network, Inc. (FANS) calls and
says that they have obtained your name from a list of victims of
a previous telemarketing fraud, and that they have recovered substantial
amounts of money for their clients. They tell you that for a fee
of 10-20% of your previous losses — or a minimum fee of $400 — FANS will
recover your losses within six weeks to three months.
Senior Citizens Against Telemarketing, or "SCAT" masquerades
as a consumer protection organization supposedly working closely
with government agencies. They say they can recover a substantial
portion of the money that you have lost and will even file lawsuits
on your behalf, if necessary. The charge ranges from $200 to $1,000.
In some cases, the recovery scam operation is run by the very same
individuals who previously defrauded you. Often, they represent themselves
as governmental entities or as agents hired to locate victims and
then distribute money back to them.
Some say they are holding money for you. Others offer to file necessary
complaint paperwork with government agencies on your behalf. Still
others claim they can get you placed at the top of a list for victim
reimbursement. After you send in the requested fee, the company invariably
fails to deliver the refund or prize, thereby exacerbating your losses.
They may even charge high fees just for providing the addresses
of pertinent government agencies which nonprofit consumer protection
agencies or libraries offer free-of-charge or at a low cost.
Although some federal and local government agencies and consumer
organizations provide assistance to consumers who have lost money,
they do not charge a fee, guarantee to get back even a portion of
your money, or give special preference to people.
Under the FTC's Telemarketing Sales Rule, it is illegal for
a recovery room operator to request or receive payment until seven
business days after you receive the recovered money or other item.
A review of victim demographics in several recovery room cases has
confirmed that older consumers are prominent. In one case, 81% of
the consumers were at least 65 years of age and 23% were at least
80 years old. In another case, 82% were at least 65 and 32% were
at least 80 years old. Losses per consumer victimized by recovery
rooms range from a few hundred dollars to thousands of dollars.
A Familiar Voice
Nortay Consultants promised to recover money that individuals, mostly
elderly, had lost to fraudulent telemarketing companies. Their telemarketers
utilized lead lists that identified the victims of other fraudulent
telemarketing companies; companies at which the callers themselves
had previously worked.
They would call the victims, falsely tell them that they had performed
research on their cases, and say they could help them recover the
lost funds. They either claimed to be a public advocacy company or
a "fraud division."
They told people that in order for them to legally represent them
in retrieving the lost funds, the victims would have to send retainer
fees, and that those fees would be applied to their charge of 25%
of all recovered funds. They also promised a refund of the retainer
fees, both verbally and in a "guaranteed service contract",
if they were unable to recover the lost funds.
Bank records showed that they obtained approximately $481,868 from
1,100 victims. In some cases they paid a small portion back to the
victims, but those who received money back had sent in more money
than they received. In general, those who sent retainer fees
received no money back in the form of a recovery of money lost to
other telemarketers; nor did they obtain any refund of fees.
Lifeline From A Lawyer
You get a call from a "lawyer" with Bailey & Steinberg
who is a representative with "H.E.L.P., INC." - "Help
Elderly Live Protected" which is described as a Boston law firm
specializing in closing down fraudulent companies.
You are told that Bailey & Steinberg has discovered that you
had previously won a Cadillac or other prize in a sweepstakes or
contest, but that the prize had been wrongfully withheld by the now
defunct, fraudulent company. Bailey & Steinberg, they say, is
now required by law to forward to you the cash equivalent of the
prize.
You are then told that you are entitled to $15,000 but you must
prepay the taxes on your winnings before they can be released. You
are asked to send this prepayment of $2000 by Federal Express or
Western Union wire transfer to a person identified as their accountant
and/or tax lawyer.
Sensing your skepticism you are encouraged to verify the bona fides
of the firm and are given phone numbers they say are for the "Better
Business Bureau" and the "Consumer Affairs Agency" for
the state. When you call to confirm, the recorded message states
that you have reached the "Better Business Bureau", requests
that you leave a message and indicates that your call will be returned
promptly.
In fact, the numbers given to you are numbers subscribed to by American
Voice Retrieval, a "direct inward dialing service." The
scammers lease the phone numbers and have their recorded messages
automatically play when the numbers are called.
They then access the message, left by you, from whatever remote
location they happen to be in, and return the call identifying themselves
as the Better Business Bureau. You are asked to wait for a moment
while a "computer search" for any complaints about the
organization is being performed, and then you are assured of the
organization's good standing and fine reputation.
The individual identified as the accountant is actually a "runner" who
works for them, picking up packages and wire transfers for small
fees ($25-50). As there actually is no Bailey & Steinberg, once
they receive your money you never hear from them again.
Finally Being Incarcerated
One story involves a telemarketer in Buffalo who went to great lengths
to get his victims to send him money. The fraudster would call an
elderly victim who'd been conned before by other telemarketers and
pretend to be an FBI agent. He would tell them
he wanted to wiretap their phone to catch a known telemarketer engaged
in a fraudulent scheme.
To pull this off, he would even make up a phony court order to authorize
the wiretap and send it to the victim. Thereafter, he would call
them back using a different voice and pretend to be with the charitable
division of the Walt Disney Company. As such, he would tell the victim
that he'd recovered the money from her previous losses and would
send it to her for a 10% fee.
Then the telemarketer would make a third call, posing again as the FBI agent.
This time the would-be agent would encourage the victim to go ahead
and send the money to the telemarketer so that they could catch this
fraudulent telemarketer red-handed.
The telemarketers' plan was to take the money and run. But the real FBI, working
with one victim, conned the con artist. They had been taping the
calls all along.
Mr. Black Not a Man in Blue
Posing as a Montreal police officer one recovery operative gained
an elderly woman's confidence by appearing to intercept a payment
she sent to a group that had defrauded her.
When he called the 84-year-old Arizona nursing home resident last
February he promised to help nail the telemarketers who had swindled
her out of $80,000 in a Quebec-based lottery scam.
All undercover officer McDermott, code name Mr. Black, needed was
$15,000 in seed money to set the trap for the Quebec-based crooks.
The widow was going along when RCMP investigators in Montreal learned
of the scheme and alerted the FBI in Phoenix.
She was so convinced of "Officer McDermott's" legitimacy
that she initially refused to believe the RCMP when told he was a
phony. Only when the RCMP contacted the FBI in Phoenix did she agree
to co-operate with them.
In April, he flew to Phoenix and met her at the airport, then took
him to her residence where she gave him $5,000 to use in his investigation.
From the police recordings of conversations, he told her his plan
was to put cash in envelopes, mail them to addresses used by fraudulent
telemarketers and arrest whomever picked up the money. He promised
that once the crooks were caught she would recover her money.
He also allegedly asked her to act as the recipient of money to
be sent by other fraud victims participating in the investigation,
including a Mrs. Johnson from Oklahoma, who wired $7,500.
When "Officer McDermott" showed up at the widow's nursing
home last week, after midnight, he signed in as Mr. Black and took
the elevator to her apartment. He told her he had a cab waiting and
could only stay a few minutes. The woman gave him an envelope containing
her $10,000 plus the $7,500 from Mrs. Johnson. Minutes later, he
was arrested.
Angelo Impellezzere, 64, a resident of the Montreal suburb of LaSalle,
is in custody facing one charge of wire fraud but FBI investigators
suspect he did not fly in from Montreal just to make a single collection. He
was ordered detained until his trial.- June 7/01
Arrests in
Recovery Operation Test Anti-Gang Law
Vasilios Recovers Easily From Arrests
On February
9, 2001, Postal Inspectors and other U.S. law enforcement agents
arrested Denis Morin, a manager of a large Montreal-based
telemarketing fraud operation, at Walt Disney World in Florida.
In a coordinated series of actions, Canadian law enforcement authorities
arrested 26 other people connected with the operation.
he room
allegedly operated as a recovery room, in which callers falsely
represented themselves as government officials, such as IRS and
Customs employees and judges, as well as lawyers.
Morin has
since been indicted in the District of Massachusetts on charges
of conspiracy, mail fraud, and wire fraud. The indictment alleges
that the operation targeted principally senior citizens and other
vulnerable members of society. One of the alleged boiler room managers
arrested in Montreal, Vasilios Kolitsidas, is also a fugitive
from a federal indictment in the Middle District of Florida.
Not Pronounced Like Decent
On January
17, 2001, a federal jury returned a verdict of guilty against Serges
Jacques Descent on all counts of a 57-count indictment, charging
him with conspiracy, mail fraud, money laundering conspiracy, and
money laundering (18 U.S.C. §§ 1956 and 1957), and including the
telemarketing fraud enhancement under 18 U.S.C. § 2326.5
According
to the evidence at trial, in 1998 and 1999 Descent used bank accounts
in St. Petersburg, Florida and Canada to channel funds from victims’ checks
that were sent in response to calls from a lottery room, presumed
to be in Canada.
Victims
included 13 people in their 70s and 80s, and four of those victims
were so frail that they could not travel to testify at trial and
had their testimony taken by video deposition. Descent was scheduled
for sentencing on July 20, 2001.
A second
defendant, Vasilis Kolitsidas, was a fugitive in this case,
but was arrested in Montreal in February, 2001 in connection with
the Denis Morin arrest (see above).
Colt Gets A Jolt
02/02 - A former RCMP officer faces a 4 1/2-year jail term
for his part in fleecing $112,000 from unsuspecting senior citizens
- a crime committed while he was investigating telemarketing fraud
for a joint Canada/U.S. task force.
Craig Richards, 55, with 32 years of service, used lists
of victims and inside information provided to him by colleagues at
the Sûreté du Québec, the FBI, U.S. Customs and the U.S. Postal Service
to defraud the very people he was supposed to protect.
Members of the recovery ring, which started in 1995, would present
themselves as lawyers who had successfully sued to recoup money lost
to telemarketers. But to get the award, victims first had to pay
Canadian taxes or excise fees, by cheque, to a post-office box in
St. Laurent.
Among four conspirators, Richards had the job of retrieving the
cheques from the mail drop. For that he got 20% of the profits. Bernard
Kurzencwig, 60, was supposed to find the victims. He has pleaded
guilty. Dimitrius Kargakos, 40, found places to cash the cheques.
He has also pleaded guilty. Howard Staviss, 44, is accused
of being the go-between for the four conspirators and has pleaded
not guilty.
Richards pleaded guilty to all 25 charges against him, including
conspiracy to steal cheques, accepting a bribe, falsifying search
warrants and police reports. Most of the charges against him
relate to defrauding ten Americans and one Canadian, ages 75 to 95,
of between $14,000 and $35,000 each prior to his arrest in 1999.
Frustrated with the RCMP, he said it was a form of vengeance against
them when they had tried to transfer him rather than promote him
for his good work which included recovering about $2 million for
fraud victims.
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