FBI Launches 12-State Telemarketing Sweep : Fraud: Authorities arrest dozens and impound property worth more than $1 million in a nationwide crackdown.
FBI agents in 12 states and the District of Columbia arrested more than 100 people Thursday, seizing a collection of boats, cars and guns and impounding more than $1 million in an unprecedented crackdown against telemarketing fraud.
The largest raids took place in Southern California, where 150 agents searched 18 telemarketing offices, making 12 arrests. The government obtained court orders freezing the outfits’ bank accounts, containing more than $300,000. Special agent-in-charge Charlie J. Parsons estimated that the Southland companies, which sold jewelry, vitamins and other goods at inflated prices, took in $34 million annually.
The raids capped a three-year investigation into telemarketing fraud across the country, dubbed “Operation Disconnect.” In Washington, FBI Director William Sessions said the investigation--the government’s biggest offensive ever against telemarketing fraud--was a response to mushrooming complaints. According to one estimate, nine of 10 Americans have received at least one suspicious solicitation from a telephone sales outfit.
Officials said they did not know how many people were allegedly victimized by the companies targeted in Thursday’s raids, though it is believed that one-third of them were elderly. Officials said they did not know how much money the telemarketers involved in Thursday’s sweep took in nationally.
“By the time this investigation is concluded, we expect to find victims in virtually every state in the union,” Sessions said at a press conference. “The tragic dimension is . . . that the largest category of victims is the elderly, those who may be least able to recover from financial losses.”
Officials said that while there was no connection among the 50 companies targeted in the raids, many used similar sales pitches to lure alleged victims. Con artists contacted potential victims by telephone or by postcard, saying they were eligible for a sweepstakes or had won a prize. The con artists then asked for $50 to $5,000 to deliver such goodies as new cars, free trips or jewelry.
Officials said that many victims never received prizes. In other cases, victims received prizes that were almost worthless.
For example, as part of the investigation, FBI agents paid $380 for a sapphire and diamond necklace said to be worth $1,200. The bureau said the gems were of poor quality, and that the necklace was worth far less than the purchase price.
According to investigators, more than one-quarter of the scams involved offers of “professional services,” including credit card deals, vacation packages, scholarships and investment and employment opportunities. Nearly one-fifth of the pitches were for vitamins. Also common were offers for skin care items, travel club memberships and pen sets.
The investigation began in Salt Lake City with FBI agents posing as sales representatives for a company that leased computerized automatic dialing systems. The tactic was so effective in learning the details of the operations that it was used in 17 other cities, Sessions said.
Besides Los Angeles, Washington and Salt Lake City, raids were also conducted in San Diego, Baltimore, Atlanta, Chicago, Detroit, Las Vegas, Phoenix, Dallas, Houston, New Orleans, Buffalo and Albany, N.Y., and Miami, Tampa and Jacksonville, Fla.
Among those arrested were Paul C. Cooper, who ran a company under his own name, and Timothy Larros, both of Huntington Beach. Authorities said they were charged with mail and wire fraud. Neither could be reached for comment. The names of the others arrested were not immediately available.
Officials released a partial list of the companies raided in the Southland: Finer Images of Culver City; Life Pro International of Tustin; American Superior Products, with locations in Fountain Valley and Costa Mesa; United Safety Associates of Huntington Beach; Weststar International of Los Angeles; Hollywood Safety Systems of Hollywood and Long Beach; Prize Winners, with locations in Long Beach and Garden Grove; United States Specialties in Anaheim; Global National of Santa Ana, and San Remo Sales of Palm Springs.
None of these firms could be reached for comment.