Washington, DC - A two and a half year operation, in which undercover agents taped telephone solicitations by telemarketers, has resulted in criminal charges against nearly 1,000 individuals, including the arrest of 40 telemarketers today, the Justice Department, FBI and National Association of Attorneys General (NAAG) announced.
The operation, code-named "Operation Double Barrel," involved close cooperation between the FBI, state attorneys general, and federal prosecutors to attack telemarketing fraud through both coordinated federal-state prosecutions and federal regulatory agency actions. Over the past 30 months, federal authorities have charged 795 individuals in 218 federal criminal cases, and state authorities have charged 194 individuals in 100 state criminal investigations.
In addition to the undercover activities, telemarketing experts trained federal and state law enforcement on how to investigate and prosecute telemarketing schemes, and federal and state authorities worked together to coordinate their prosecutions.
During the operation, which the FBI coordinated, undercover agents posed as individuals who were previously victimized by telemarketing fraud. Because the names of previous victims are sold to telemarketers, these individuals are often called repeatedly. To bolster resources, the FBI also trained and supervised senior citizens, recruited through the AARP, who posed as previous victims as well.
Using consensual tape recordings, the agents and senior citizens gathered evidence about telemarketing fraud schemes and provided tapes to federal and state law enforcement, federal regulators, and even foreign law enforcement for possible legal action.
"This holiday season will have a few less scams and a lot more cheer, thanks to Operation Double Barrel," said Attorney General Janet Reno. "Operation Double Barrel took aim at those telemarketers who sought to reach out and con you."
Reno noted that over the past four years, there has been a rise in the number of bogus investments and other telemarketing schemes.
FBI Director Louis J. Freeh said, "These crimes leave a trail of tragic consequences. Life savings are lost. Financial devastation is common. This coordinated, multi-level approach has once again demonstrated the benefit of a seamless, local, state and federal effort that has the broad support and help of both senior citizens and private organizations."
Georgia Attorney General Thurbert Baker said, "This joint campaign is tightening the vise on the phone rip-off artists who target older Americans and many other citizens. State Attorneys General, the FBI and others at the Justice Department share the common goal of finding these criminals, prosecuting them, and putting them in prison. We are sending a strong message across the country that you can no longer commit these crimes with impunity."
The following is a typical case of those involved in Operation Double Barrel:
· Kentucky Attorney General Albert "Ben" Chandler III announced the indictments of two magazine telemarketers who operated a magazine telemarketing business and promised prizes to those who purchased magazine subscriptions. Persons who purchased the subscription reportedly received neither the magazines nor the prizes. Attorney General Chandler announced the indictment of each defendant on three felony counts of theft and one misdemeanor count of theft. In bringing these indictments, Attorney General Chandler relied on the assistance of the U.S. Attorney in Los Angeles, as well as the FBI field office in Riverside, California, which provided the state with investigation material about the defendants, their operation, and Kentucky-based victims of the scheme. One Kentucky victim of the scheme stated, "I may be 77, but I am ready for a fight."
The operation involved 20 U.S. Attorneys' Offices. Twenty-one FBI field offices and 35 state attorney general's offices, as well as the Postal Inspection Service, the Federal Trade Commission, the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Fraud Section of the Department's Criminal Division.
Attorneys General in the following states participated in the operation: Arkansas, Arizona, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia and Wisconsin.
"Operation Double Barrel is our coordinated response to this ruthless assault on senior citizens and others by telemarketing," said Reno. "The operation represents the highest level of cooperation between law enforcement authorities at every level of government to combat telemarketing fraud."
Reno, who was joined by Ted Jackson, Deputy Assistant Director of the FBI's Criminal Investigative Division, and Georgia Attorney General Thurbert Baker, said that in the last 60 days 139 subjects had been charged in 48 federal cases, 60 individuals had been arrested, and 28 searches had been executed. Approximately 20 search warrants were executed today alone.
Operation Double Barrel grew out of an earlier nationwide undercover operation called Operation Senior Sentinel, which Reno announced in December 1995. That operation involved the first nationwide use of consensual recording of conversations between telemarketing solicitors and undercover agents or cooperating senior citizens. As in Double Barrel, specially trained volunteers from AARP, law enforcement agents and retired agents tried to catch telemarketers who had bought lists of phone numbers of previous telemarketing victims.
To date, more than 12,000 tape recordings of illegal solicitations have been compiled.
From 1993 to July 1996, Senior Sentinel resulted in the conviction of 598 individuals, the execution of 104 search warrants and the investigation of 180 telemarketing "boiler rooms."
Since 1995, federal authorities have been dismantling concentration of large-scale "boiler rooms" that conducted telemarketing in areas such as Buffalo, Chattanooga, and Las Vegas. As a result, authorities noticed that telemarketers were moving away from large-scale "boiler rooms" that conducted deceptive telemarketing and into other types of operations.
One of the newer scams is the so-called "rip and tear" operation. In that scam, small groups of telemarketers typically call previous victims and falsely represent that they can help them receive some of their losses. In many rip and tear operations, the telemarketer pretends to be with a federal law enforcement agency, such as the FBI, the IRS or the U.S. Customs Service.
"Anyone who calls you, tells you they're from the FBI, and asks you to pay a fee so they can get your money back, is lying," said Attorney General Reno. "No federal law enforcement agency will ever charge fraud victims a dime when they try to get money back for victims." Reno urged anyone who receives such a call to contact the nearest FBI office.
Another type of telemarketing is the bogus investment scheme. In these scams, telemarketers craft their sales "pitches" to make would-be investors believe they will get high returns on their investment if they wait for long periods of time.
"Unfortunately, by the time that the investors realize that the investment may not be legitimate, the people who ran the scheme may be long gone," said Reno.
To enhance the capabilities of federal and state prosecutors and investigators to work together on telemarketing fraud investigations, federal and state law enforcement authorities held a series of joint training sessions. The Department and FBI conducted training for federal prosecutors and agents, and NAAG. Also, the American Prosecutors Research Institute, under a grant from the Department's Bureau of Justice Assistance, conducted similar training sessions for state and local prosecutors and investigators.
Reno urged consumers to resist high-pressure sales tactics and to take their time about putting money into investment opportunities with which they were unfamiliar. She indicated that individuals seeking more information about telemarketing fraud can click onto the Department's Web site, which has Web pages on telemarketing fraud at [English] and [Spanish].
Reno also noted that consumers can contact the FTC's Consumer Response Center at 1-202-FTC-HELP (1-202-382-4357) to get information about fraud or file complaints. The public can find the web page for the Attorney General in their state by visiting the NAAG Web site at .
A criminal charge is not evidence of guilt, and each person arrested is entitled to a presumption of innocence until guilt is established by trial or by plea.