by Archana Subramaniam by CNB
Roanoke Times Copyright (c) 1995, Landmark Communications, Inc. DATE: FRIDAY, March 5, 1993 TAG: 9303050239 SECTION: BUSINESS PAGE: B8 EDITION: METRO SOURCE: Associated Press DATELINE: WASHINGTON LENGTH: Medium
FBI RAIDS 50 PHONE MARKETERS
The FBI raided more than 50 businesses in 12 states and the District of Columbia on Thursday in what law enforcement officials described as the biggest crackdown ever against telephone sales swindlers.By late afternoon, 800 FBI agents involved in a three-year undercover investigation had arrested 116 people involved in telephone pitches.
FBI Director William Sessions said the investigation had identified 548 people involved in 123 illegal telemarketing operations across the country. At least 240 arrests were expected, officials said.
"By the time this investigation is concluded, we expect to find victims in virtually every state in the union," Sessions said.
"The tragic dimension is . . . that the largest category of victims are the elderly, those who may be least able to recover from financial losses."
Acting Attorney General Stuart Gerson said consumers are being conned out of billions of dollars a year through fraudulent offers.
The raids were conducted on telemarketing operations in Washington; Baltimore; Atlanta; Chicago; Detroit; Las Vegas; Salt Lake City; Phoenix; Los Angeles; San Diego; Dallas; Houston; New Orleans; Buffalo and Albany, N.Y.; Miami, Tampa and Jacksonville, Fla.
Billed as "Operation Disconnect," the investigation began in Salt Lake City with FBI agents posing as sales representatives for a company that leased computerized automatic dialing systems. The cover was so effective in learning the details of the operations that the same tactic was used in the 17 other cities, Sessions said.
Most of the schemes, officials said, involved con artists calling people and telling them they were eligible to enter sweepstakes or had won a prize. The victims then were told they had to pay a service fee or buy something in order to collect the prize, or they were lured into buying a more costly item.
The most popular offers involved discount coupons, vacation packages, credit and debit cards, automotive service, small-business loans, investment and employment opportunities, skin care products and vitamins.
"In the end, the items ordered or promised are never delivered, or are far less valuable than the telemarketer's claim," Sessions said.
He said the "professional services," such as distributorships and job or investment offers, usually were priced at $750 to $2,000, but a couple of them required advance fees as high as $50,000.
Sessions displayed a sapphire and diamond necklace that an undercover agent bought for $380 after being told it was worth $1,200.
"Some bargain," he said. "The diamonds and sapphires are poor quality, the chain isn't the 14 carat gold it was claimed to be and it's worth far less than the $380 we paid."