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.