THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, March 3, 1995 TAG: 9503030550
SECTION: LOCAL PAGE: B3 EDITION: FINAL
SOURCE: BY LYNN WALTZ, STAFF WRITER
DATELINE: NORFOLK LENGTH: Medium: 67 lines
Colonial Distributing Inc. had all the trappings of a legitimate business. It had a Norfolk business license and a commercial bank account at NationsBank. It withheld federal taxes from employee paychecks and had offices on Chesapeake Boulevard.
But the business was far from legitimate, federal prosecutors alleged this week when they indicted three of the owners.
Instead, they said, it was an old-fashioned scam operated by slick telephone solicitors who used false promises of prizes to convince naive people to part with their cash.
On Thursday, in federal court, business principal Gus John Boogades was denied bond after his arrest this week at a restaurant where he lived and worked a new job. FBI agents also say they seized a loaded pistol on his night stand and a stash of methamphetamines hidden in a rubber glove.
Gerald A. Parady and Steven H. Wroten, Boogades' partners, were also indicted. They will be transferred here later this month from Tampa and Las Vegas, where they were arrested this week.
The indictment says the men operated a business in Norfolk that, over seven months in 1992, bilked 200 victims out of $133,715. Each victim lost between $298 and $998, the indictment said, ``depending on the victim's vulnerability and willingness to pay, and the skill and persuasiveness of the caller.''
The victims were in Louisiana, Florida, Massachusetts, Tennessee, Missouri, West Virginia and Ohio.
Callers used promises of ``bonus awards'' to convince victims to make telephone purchases, prosecutors said. The callers sold health and beauty packages, imprinted pens, drink holders, calendars, key chains and a ``Say No to Drugs'' package with bumper stickers and anti-drug merchandise.
But the bonuses were bogus, the indictment said. Victims were offered chances to win a new Pontiac LeMans; a $2,500 home entertainment system; a $5,000 shopping spree or a $1,500 consolation prize.
What victims didn't know was that they could only win one - the shopping spree. And that was a scam as well.
Instead of a real shopping spree, they would have to buy more merchandise from a catalog - merchandise that was overpriced, then discounted with credits from the $5,000 bonus award.
According to the indictment, the three men were careful to elude detection by not soliciting victims in Virginia, where the business was located. And they avoided Michigan, where they had a relationship with another telemarketing firm, and New Mexico, where others have been indicted for similar schemes.
Alfred Tripp, Boogades' attorney, asked the judge to allow his client out on bail, saying he had close family in the area.
Boogades turned frequently to gesture lovingly at a baby held by her mother, who sat on the front row. Boogades' mother sat beside her.
But the judge refused to release him, after prosecutors argued that an FBI informant said Boogades told him he would leave the area if charged. ILLUSTRATION: Graphic
THE LOSSES
The indictment says:
The three men operated a business in Norfolk that cheated 200
victims out of $133,715.
Each victim lost between $298 and $998.
by CNB