Operator of Vacation Fraud Plot Gets 6 Years

A Malibu man was sentenced Monday to six years in prison for heading up what federal authorities say is the largest boiler room fraud operation ever uncovered in California.

Lawrence David Berry, 40, was also ordered to pay a $250,000 fine for his role in a vacation travel scheme that, prosecutors said, sought to bilk about 3,000 victims of more than $1.1 million by offering “free” trips to Hawaii.

Employing more than 400 telephone solicitors using 90 telephone lines at its Wilshire Boulevard offices, the Executive Gold Card Travel Club placed more than 250,000 calls during its 60 days of operation in March and April, 1985.

Potential victims were told they had won a free trip to Hawaii, but a credit card number was needed to validate them for the trip, prosecutors said. Unauthorized charges were then placed against the victims’ credit card accounts and laundered through legitimate third-party merchants’ accounts in order to obtain payment from the banks.

Only about $10,000 to $15,000 of the $1.1 million in credit card charges was actually paid out, and most individual clients have received refunds on charges to their accounts, said Assistant U.S. Atty. Mark Bonner, who prosecuted the case.

However, a number of other companies that did business with the travel club lost more than $250,000 because of the firm’s failure to pay its bills, and one long-distance telephone company lost $100,000 because of the firm’s use of stolen long-distance access numbers, Bonner said.

“I don’t know that this is the worst fraud that I have ever seen in this courthouse. But as far as its scope and the rank nature in which it was done, I’m hard-pressed to think of a worse one,” Bonner told U.S. District Judge A. Wallace Tashima.

Berry, described as the manager of the operation, and Roy David Castner, of Canoga Park, were convicted of more than 20 counts of mail fraud, wire fraud, bank fraud and telemarketing fraud in the first use of federal bank fraud statutes to combat a credit card laundering scheme.

Castner did not appear for sentencing Monday and his lawyer said she had not heard from him since Friday. Tashima postponed Castner’s sentencing until Nov. 9.

Berry and his attorney, Robert L. Shapiro, had sought a community service sentence and a chance to make restitution to some of the victims.