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Document and Benefit Fraud
01/11/2010

Feds return money to Bay Area scam victims

Investigators warn public to be wary of callers soliciting money

SAN JOSE, Calif. - Investigators with U.S. Immigration and Customs Enforcement (ICE) and the U.S. Postal Inspection Service (USPIS) Monday returned $7,000 to an elderly San Jose couple victimized by Canadian con artists who told them they had won a multi-million dollar Canadian sweepstakes.

ICE and USPIS investigators handed the octogenarians a check for a portion of the funds they forwarded to a Canadian postal box over the course of the last several months. The money was ostensibly to pay the Canadian "luxury" tax on the sweepstakes winnings so they could collect the prize. Like many elderly victims targeted in this and similar telemarketing scams, the couple believed the man who called them last year claiming to be an attorney responsible for alerting them about their sweepstakes win. In response to repeated appeals, the couple mailed multiple cashiers checks and packages containing cash to various Canadian addresses.

The check given to the couple this week represented the cash found in a parcel intercepted by Canadian authorities assigned to Project COLT (Center of Operations Linked to Telemarketing), a binational effort involving numerous agencies, including ICE, USPIS, the Federal Bureau of Investigation (FBI), U.S. Customs and Border Protection (CBP), the Royal Canadian Mounted Police and the Quebec Provincial Police. The case is under ongoing investigation by Canadian authorities.

"This couple is fortunate investigators were able to recover some of the money they lost, but regrettably much of their life savings will probably never be accounted for," said Mark Wollman, special agent in charge for the ICE office of investigations in San Francisco. "While ICE and its enforcement partners are doing everything possible to stop this kind of fraud, the first line of defense is for people to be suspicious of anyone who calls and asks them to send money."

This week marks the second time in as many months ICE agents have intervened in a case involving an elderly local resident targeted by Canadian telemarketing con artists. In November, they returned $4,000 to a San Jose woman who sent that sum in cash to Canada after receiving a call from a person claiming to be her grandson. The male caller said he was in jail and needed bail money immediately. Soon after, the woman received a call from a man purporting to be her grandson's attorney who urged her to send the money without delay. Only later did the women learn that her grandson was not in jail and never had been.

"Sadly, we encounter these types of scenarios over and over again," said Joseph Adiano, inspector for the USPIS. "While it's hard to believe people fall for ploys like this, you have to remember the telemarketing con artists are incredibly persuasive and they purposely prey primarily on the elderly, who tend to be more trusting."

Authorities say the most frequent telemarketing scam involves callers posing as "customs agents" who tell victims they have won the Canadian lottery but must send a "processing fee" or "customs duty" before they can collect their winnings. The fraudulent telemarketers may also purport to be lawyers, government officials, police officers, accountants, or lottery company officials. Investigators emphasize the con artists are very believable and will persist until they bilk as much money as possible from their victims.

Initiated in 1998, the goal of Project COLT is to identify, disrupt, and dismantle telemarketing fraud operations. As part of the initiative, law enforcement officers strive to intercept funds - often cash and cashier's checks - so they can ultimately be returned to victims. Project COLT investigators also work to prevent further victimization, both through public education and the prosecution of those who commit the fraud.

Since its inception, Project COLT has resulted in the seizure and return of more than $25 million to telemarketing fraud victims in the United States and Canada. Telemarketing fraud has become one of the most pervasive forms of white-collar crime in Canada and the United States, with annual losses in both countries in the billions of dollars. These criminal organizations are heavily involved with international and violent organized crime, including the Hell's Angels motorcycle gang, and as such they represent a significant assault on the United States homeland and upon the financial security and livelihood of its citizens.

Project COLT members also have formed partnerships with Canada Border Services Agency, Canada Post Corporation, Federal Express, Purolator, United Parcel Service, DHL and other companies to assist with fund interception and return.

Before sending any money to telemarketers, ICE urges the public to contact PHONEBUSTERS, Canada's Anti-fraud Call Center at 1-888-495-8501. The staff at PHONEBUSTERS work closely with Project COLT investigators and other law enforcement agencies. More information on the initiative is also available through the PHONEBUSTERS website at www.phonebusters.com.