Federal Authorities Coordinate Filing of Charges Against Individuals and Companies on Telemarketing and Postal Mail Fraud Schemes

On Thursday, February 22, 2018, federal authorities released news of formal charges filed against individuals and companies accused of telemarketing and postal fraud schemes targeting seniors.  The charges focus on more than 250 defendants, located both in and outside of the U.S.

The Federal Trade Commission’s press release provides specific details from two cases filed in coordination with authorities in the State of Missouri.  In the first case:

[T]he FTC and the State of Missouri charged two men and their sweepstakes operation with bilking tens of millions of dollars from people throughout the United States and other countries.

 

The FTC and Missouri allege that the defendants, doing business under dozens of different names, sent tens of millions of personalized mailers falsely indicating that the recipient had won or was likely to win a substantial cash prize, as much as $2 million, in exchange for a fee ranging from $9 to $139.99.

 The Defendants distributed three types of phony mailers:        

• Notices such as “Congratulations, You Have Just Won $1,230,946.00,” when the consumer hasn’t actually won anything;
• Fliers that claim the recipient can win a substantial cash prize by answering a simple arithmetic question and paying  a registration fee, but that don’t disclose that there are multiple rounds to the “game of skill,” that the consumer will have to pay additional fees to advance to each round, and that in order to win, the consumer will have to answer a final, complex puzzle that few people, if any, can solve; and
• Mailers that appear to be notices that the consumer has won a prize of $1 million or more, but that are really just newsletter subscription solicitations.

In the second case: 

[T]he FTC alleges that the defendants worked with Indian telemarketers to trick older Americans into buying bogus technical support services. Specifically, the defendants set up business accounts for the telemarketers, collected and deposited consumer payments, and provided a gloss of legitimacy to the scheme.

During my sabbatical last year, I often had occasion to answer the phone in my elderly mother’s home. The majority of calls were from scammers, including those posing as the IRS, those offering “specialized health insurance,” or seeking to “confirm” the homeowners’ bank numbers for deposit of some kind of “winnings.”  I was stunned by the volume of the calls — and the persistence of the callers. If you tried to hang up, the callers would often ring back within seconds.  

Also, during my time as director of  Dickinson Law’s Elder Protection Clinic, I can remember one particularly troublesome case involving a so-called Jamaican lottery scam, where the senior in question had been a sophisticated investor for her entire adult life, but was unable to resist the siren song of a scammer who managed to convince her to repeatedly send him money.  It was one of my first personal experiences with how dementia and financial abuse can intersect, through a particular form of early onset dementia known as FTD (frontotemporal disease).  The impairment often impacts judgment and the ability to evaluate risk, including financial risk.