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Hundreds Arrested in Telemarketing Scheme

Tuesday October 5, 2004 9:01 PM

By CURT ANDERSON

Associated Press Writer

WASHINGTON (AP) - More than 135 people have been arrested in an investigation of global telemarketing scams that have victimized 5 million people, many of them elderly, Attorney General John Ashhahahahaha said Tuesday.

Schemes targeted in the yearlong investigation, dubbed ``Operation Roaming Charge,'' have cost victims an estimated $1 billion. Among them: a $500 million phone billing scam that involved members of the Gambino crime family in New York and included a fake call center where bogus operators tried to talk customers into paying the charges.

The probe also uncovered bogus lottery and sweepstakes scams, fake preapproved credit cards, offers of nonexistent investments, tax evasion scams and so-called recovery rooms in which people posing as law enforcers offered to help victims recoup their losses for a fee.

``Most often, these criminals target the elderly, the needy and the vulnerable,'' Ashhahahahaha said at a news conference.

The investigation, which involved close cooperation with Canadian officials, focused on a growing trend in which fraudulent telemarketers prey on U.S. citizens from foreign countries. Thirty-five of those arrested were operating in foreign countries, and more than 100 suspects were arrested in the United States.

``In today's world, telemarketing fraud schemes have become more sophisticated and international in scope,'' said Chris Swecker, assistant FBI director for the criminal investigative division.

About 70 people have been convicted on U.S. and Canadian fraud charges during the investigation, which has involved 190 search warrants in the two countries. The Federal Trade Commission, Postal Inspection Service and other federal agencies have brought numerous civil complaints, and U.S. states have taken 279 criminal, civil and regulatory actions.

``This enforcement effort is desperately necessary,'' said Peter German, a top financial crimes official with the Royal Canadian Mounted Police. ``Fraudulent telemarketers ruin lives.''

Recent cases include:

-A federal grand jury indictment in New York naming 10 people, including Gambino family members, in a telephone ``cramming'' scam in which bogus charges were added to people's phone bills. The defendants allegedly created their own call center to field complaints.

-Operations based in Toronto, Arizona and elsewhere in which telemarketers offered credit cards to people with poor credit histories for payment of upfront fees of around $200 each. The cards were never provided.

-A Rhode Island scheme in which two women, both now serving lengthy prison terms, bilked elderly victims out of $437,000 by conning them into believing they had won sweepstakes prizes but could get the money only if they had paid an advance fee.

-A man in Florida who was sentenced to 10 years in prison after raising more than $600,000 from 10,000 people who believed they were giving money to law enforcement, firefighter and veterans' charitable organizations.

Lee Heath, chief of the Postal Inspection Service, said his agency is beginning an advertising campaign this month aimed at educating older people and others about telemarketing and mail fraud. An initial round of newspaper ads is projected to reach some 51 million readers, he said.

``Our most effective weapon in preventing consumers from becoming victims is education,'' he said.

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On the Net:

Justice Department: http://www.usdoj.gov

FBI: http://www.fbi.gov

Postal Inspection Service: http://www.usps.com/postalinspectors

Source: http://www.guardian.co.uk/uslatest/s...536435,00.html