4 Agencies Raid Telemarketing Firm in Newport

Twenty-five federal and state investigators from four agencies raided Sterling Edington Financial Services on Wednesday, seizing the telemarketing firm’s books and records on grounds that it may be engaged in boiler room fraud.

No charges were filed against the company or any of its employees but officials succeeded in temporarily closing down the company, taking all of its documents and interrupting phone service.

The company is under investigation by the Orange County district attorney’s office, the state Department of Corporations and the U.S. Postal Inspectors Office. The Newport Beach police assisted in Wednesday’s raid.

“The investigators have reason to believe that crimes were being committed,” said Deputy Dist. Atty. Dave Frank. “Those activities pertained to alleged violation of telemarketing statutes.”

Sterling officials could not be reached for comment Wednesday.

Federal and state investigators said they did not know if anyone had lost money investing in Sterling products--precious metals and oil partnerships--or even how many people had been contacted by the firm.

Four of Sterling’s employees were arrested Wednesday morning on charges unrelated to telemarketing. Steven D. Campbell, 39, an accountant for Sterling, and Dixie E. Campbell, 33, a supervisor, were charged with possession of marijuana, according to Newport Beach police spokesman Andy Gonis. The Campbells, of Newport Beach, were each required to put up $10,000 bail before being released. Tagiwirely Martin, 23, of Laguna Niguel and Donald L. Ault, 20, of San Pedro were both arrested on outstanding warrants for driving with suspended licenses. Martin, according to Gonis, is a Sterling account executive. Ault’s position at the company was unclear.

Postal Inspector Aaron Ward said investigators suspect Sterling of telemarketing fraud. Officials say the company was selling customers precious metals and oil and gas partnerships but they suspect at least some of the deals aren’t quite what was promised.

For instance, Ward said prospective investors were encouraged to buy into a north Texas oil field and told that “there was oil drilling or other oil producing functions going on at this field. It is my understanding that is not the case.”

Sterling, according to investigators, additionally sold silver and palladium over the phone, requiring investors to make down payments amounting to 15% to 25% of the metals’ supposed value.

Ward said Sterling sold these investments to customers along the East Coast and in Hawaii. The firm had 15 to 20 employees.

Records with the California secretary of state’s office indicate Sterling was incorporated on Feb. 8, 1991.