Crimes of Persuasion

Schemes, scams, frauds.

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

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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