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6 Found Guilty in $10-Million Boiler-Room Scam : Courts: Victims nationwide were misled into thinking they had won expensive prizes and were told to send money for them.

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TIMES STAFF WRITER

A federal jury Tuesday found six Orange County men guilty of defrauding more than 1,000 mostly elderly people from across the nation of more than $10 million.

The case was one of the largest prosecutions so far in Operation Disconnect, a federal crackdown on boiler rooms that sell bogus investments or goods costing far more than their value. The FBI last year made 240 arrests involving boiler-room scams in 13 states, including California.

“We’re very pleased with the verdict,” said Assistant U.S. Atty. Bart H. Williams. “Orange County is sort of a hotbed for telemarketing fraud. We hope this shows the government intends to prosecute even very sophisticated frauds. This was very sophisticated.”

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Convicted were Timothy J. Laros and Paul C. Cooper of Huntington Beach, who prosecutors said owned and managed four companies that ran boiler rooms.

The telemarketers either told the victims that they had won expensive prizes such as cars as part of promotional campaigns for health and safety products, or they exaggerated the chances of winning them, prosecutors said.

The salespeople made thousands of calls a day all over the country, prosecutors said. Victims were told to send hundreds and sometimes thousands of dollars for items worth far less.

After eight days of deliberations following a 5 1/2-month trial, the jury convicted Laros and Cooper of conspiracy, two counts of mail fraud and 15 counts of wire fraud. The companies’ controller, Fred Bakhshekooei of Laguna Hills, was convicted of the same counts.

Three others, general manager Joseph Robles of Orange and salespeople Kam Foo and Darrell Vartanian of Huntington Beach, were convicted of two counts of wire fraud and one count of mail fraud each.

Foo and Vartanian were two of the companies’ top salesmen, generating between $300,000 and $400,000 a year, Williams said.

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Prosecutors expect to ask U.S. District Judge Alicemarie H. Stotler to sentence the six men to four to eight years in federal prison when they return to court on Feb. 27.

The companies involved in the scam were United Safety Associates of Huntington Beach; Life Pro International of Tustin; American Superior Products of Costa Mesa and Fountain Valley, and Midwest Home and Family of Huntington Beach and San Antonio, Tex.

The FBI fraud investigation that led to the arrests last year was a response to mushrooming complaints, FBI officials have said. One estimate shows that nine of 10 Americans have received at least one suspicious solicitation from a telephone sales outfit.

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