Authorities Crack Down on Mail Schemes

Taking aim at direct-mail solicitors, the Federal Trade Commission said Wednesday that a joint force of federal and state authorities has brought 190 civil or criminal fraud actions against operators of direct-mail schemes, including 10 in California.

The investigators and prosecutors took over an Encino computer repair firm last week, put a five-time felon behind bars in Orange County for misdemeanor fraud and collected $500,000 from an Irvine firm that used more than 200 business names to collect $100 million from sweepstakes mailings.

The coordinated effort is the first of its kind to attack fraudulent solicitations mailed to consumers nationwide, said Collot Guerard, an FTC attorney coordinating the effort.

On Wednesday, the officials revealed the joint force and its operation, which they dubbed Project Mailbox.

“It’s just very, very clear that even though authorities are focusing on telemarketing and Internet fraud, snail mail is as prolific as ever,” Guerard said.

The joint force, consisting of representatives of the FTC, the FBI, the Postal Inspection Service, state attorneys general and local agencies, is getting help from 1,500 senior citizens who are turning in suspect mail to the American Assn. of Retired Persons.

“Seniors are the special target for mail and telemarketing con artists,” Wisconsin Atty. Gen. Jim Doyle said in prepared remarks.

They have already helped Wisconsin and other states, as well as the FTC, take down fraudulent telemarketing schemes offering sweepstakes prizes, discounted vacations and time-share sales. In the actions announced Wednesday, the FTC initiated two, both against Southern California companies.

The agency won a court order last week appointing a receiver to take over the operations of National PC Systems in Encino and freezing the assets of its owner, Jeffrey L. Rayden, and operators.

Calling itself a computer repair service with “1,200 convenience centers located coast to coast,” National PC sent mailings that appeared to be bills for computer service contracts to organizations that had not ordered the services, according to the FTC suit made public Wednesday.

Neither Rayden nor his lawyer could be reached for comment.

“Many of those solicited paid by mistake, and half of them are churches or charitable organizations,” said Joel N. Brewer, an FTC attorney.

In its other action, the FTC said it has already received $500,000 to settle its investigation into Direct American Marketers Inc. in Irvine, which allegedly misled consumers with its direct-mail advertising.

DAMI, using names including Audit Control Bureau and ACG Clearinghouse, flooded the mailboxes of millions of Americans with fliers, many of them authentic-looking checks marked “Not Valid.”

The company offered prizes to those who dialed its 900 pay-per-call telephone number. Those who didn’t read the small print on the back of one of the enclosures failed to realize that the calls typically cost $30 each.