Inside
the dark art of phone fraud
Clever conmen, vulnerable targets.
What can you do?
By Lea Thompson
Reporter's notebook
Chief Consumer Correspondent
Dateline NBC
Updated: 11:09 p.m. ET Sept. 26, 2004
I've been covering phone fraud for years and every time I try to tackle
one of these criminal chameleons I am struck by how ruthless they are.
Many are phone gangsters. They work in gangs, they are very tough and
they are extraordinarily elusive. Their victims are often the most vulnerable
and the least able to take the monetary or the emotional hit.
It is hard to explain how clever and sophisticated these guys are unless
you can infiltrate them with hidden cameras or catch them somehow in the
middle of their crime. So, when we noticed a short AP wire story about
the conviction of a Canadian conman who was caught on audio tape scamming
a Phoenix woman, we jumped on the story. We called the FBI agent on the
case, Julia Halferty, a longtime crusader against telemarketing fraud,
and asked if we could have the tapes. She was enthusiastic. She felt by
airing them, others could be protected.
But the Justice Department wasn't so quick to respond. We filed Freedom
of Information Act requests, we cajoled, we pleaded, we made scores of
phone calls. Ultimately, it took two and a half years to persuade the
FBI to release the Phoenix tapes.
In the meantime, we discovered other FBI cases where the agency wiretapped
phone gangsters. In all, the diligent and dogged producer of this story,
Sandra Thomas, collected 50 audio cassettes. They contain hours and hours
of chilling conversations between heartless conmen and their unwitting
victims.
And frankly, the more we listened to the tapes, the more outraged we became.
For weeks, the ugly, nasty calls, the filthy language, the scary threats
these guys make, were played out in our office. I can only hope no one
in your family ever gets one of these calls. If someone you love falls
for them, they can be a devastating emotional roller coaster that takes
its toll on people -- sometimes even kills them. The daughter of one woman
who was persuaded to send most of her family's nest egg told us how, when
her Mom found out she had been scammed, she killed herself.
It's astounding how often people get taken in these phone schemes. The
FBI estimates losses from telemarketing fraud emanating just from Canada
exceed $100 million a year. That may be a low figure because victims often
don't report the crimes because they are too embarrassed or they never
do realize they have been taken.
So, please take a look at how these scams work. Here's also what you can
do if someone you love is a target. And don't hesitate to call the FBI
if you have information about probable victims and ongoing phone calls.
How the prize scheme works
* It usually starts with mailings that offer chances to enter sweepstakes
or join lottery clubs, often based in foreign countries. If you respond
to one of these, you are marking yourself as a potential victim. Your
name will go on a sucker list and you will be hounded relentlessly. Even
if you don't participate initially, they will keep trying in the hopes
of eventually breaking you down.
* You will get a call telling you you have won a prize. They will urge
you not to tell anyone or your jackpot could be jeopardized.
* You will be advised you need to pay advance taxes or fees (for attorneys,
money transportation, international transfers, money exchange rates).
They will ask for the payments in cashier's checks or most often by wire.
And, you will be hit again and again for various fees until you start
balking. If you stop paying, you may be threatened that you'll lose everything
if you don't pay, or, you've broken some law. They may even say though
your prize hasn't been delivered, you can be prosecuted for tax evasion.
Sound clip: "You're dealing with an officer. And I am within my right
to arrest you right now if I would want to. Okay? So let's get things
clear. You're going to get some money at the bank. Right now."
* You may even be bilked by phone conmen linked to organized crime like
the mafia and motorcycle gangs. Here's a conman showing his true colors:
Sound clip: "Who the f*** you think you're talking to? I'll come
down there and break your f***ing knee caps."
* If that doesn't work, conman may try a "comeback" or "reloading"
scheme. They might call you posing as police, judges, investigators or
an IRS investigator. That person may tell you he/she is investigating
the conmen who scammed you. That usually comes as a big relief to victims
who want very much to believe someone can help them. Again you will be
told to keep this a secret because the investigations are under grand
jury gag order or something along those lines. The conmen will work very
hard to prevent others who care about you from finding out what is going
on.
* Often, the supposed authority figure will ask you for money so he/she
can use it for a sting to catch the crooks red-handed.
* Even if you run out of money, they will press you to pay. They will
threaten you, scare you, suggest you cash-in investments or mortgage your
home. Here's a conman trying to get money out of a man who is a stroke
victim, a man who has already lost everything to conmen:
Conman: "You've paid $37,000, so the balance of $50,000. Now I need
to know how fast these taxes can be paid sir."
Victim: "I'm very, very, very broke."'
Conman: "Oh, you're broke? You don't have any investments you can
borrow from sir?"
How the investment scheme works
* The other major scam these conmen tend to run evolves around investments.
It's very similar to the prize scheme, but involves investments instead
of lotteries.
* It starts with mailings about everything from foreign sweepstakes to
investments.
* Then you get calls from New York brokers or foreign investment experts
who offer to get you in on a special investment that is guaranteed to
pay huge returns. The investments are always limited to certain people
like you and are "limited offers." You are told if you're a
"good client," you will get many other chances to get on the
ground floor of big pay-off investments. They will ask for the payments
in cashier's checks or most often my wire.
* They'll want and will take everything you have and threaten if you tell
anyone about the investments or phone calls, all the deals are off.
* When the threats no longer work, then the conmen try the "comeback"
or "reloading" scheme. They might call you posing as police,
judges, investigators or an IRS investigator. That person may tell you
he/she is investigating the conmen who scammed you. That usually comes
as a big relief to victims who want very much to believe someone can help
them. Again you will be told to keep this a secret because the investigations
are under grand jury gag order or something along those lines. The conmen
will work very hard to prevent others who care about you from finding
out what is going on.
How to detect a con
If someone you know seems to be getting an unusual amount of sweepstakes,
lottery and investment offers in the mail it's your best clue they either
are or are soon to be targeted and already under the spell of phone gangsters.
Some people end up getting hundreds of pieces of mail just in a week's
time.
Phone gangsters always give their victims reasons why they should not
talk about their prize winnings, tax payments or any investigations with
anyone So if you suspect a loved one is under the spell of these criminals,
just asking them may not be enough. And looking at their checking account
may not provide clues either. Conmen often ask the victims to get cash
and wire it or send cashiers checks.
If anyone calls asking you to send money for prize winnings or secret
investments, hang up immediately. The more time you spend talking with
these men, the more chance you have of being duped. They are often highly
skilled conmen who will pursue you relentlessly if you give the slightest
indication you can be engaged.
Where you can call for help
Contact the FBI by calling 800 251-3221 or find the number for your local
FBI field office at:
http://www.fbi.gov/contact/fo/fo.htm
You can also file a complaint online at:
http://www.ifccfbi.gov/cf1.asp
Here's another Web site on "tip-offs to rip-offs" and "how
can you protect yourself": http://www.ftc.gov/bcp/conline/pubs/tmarkg/target.htm
And you can learn a lot more at these websites:
http://www.ftc.gov/bcp/conline/edcams/telemarketing/ditchthepitch.htm
http://www.usdoj.gov/criminal/fraud/telemarketing/doj.htm
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