July brought two more U.S. prosecutions against alleged Canadian telemarketing scams. On July 16, 2003 the Federal Trade Commission (FTC) announced that Calgary-based Ambus Registry, Inc. had agreed to a preliminary injunction based on FTC allegations that Ambus called American consumers and companies and misrepresented that the consumers or someone in the company had authorized on their behalf the purchase of "American Business Registry" along with a listing in the directory. Two weeks later, on July 31, 2003, Massachusetts U.S. Attorney Michael J. Sullivan announced that his office was slapping seven Montreal-based Canadians with federal charges relating to an extensive telemarketing scam that targeted U.S. senior citizens.
The FTC's complaint [pdf format] against Ambus and its two principals, Garther Cheung and Sukhraj Singh Chana, which was filed under seal in federal court in Seattle, alleges defendants violated Section 5 of the FTC Act by falsely representing that consumers previously had authorized the purchase of the American Business Registry and a listing in the directory. Defendants allegedly trained their telemarketers to use deceptive sales tactics to convince Americans that someone in their company had authorized a listing in the directory and the purchase of the directory itself; then they billed them for between $299 and $399. Often the call was made ostensibly to ask for verification of the wording of the listing in the directory. According to the FTC, Ambus claims that consumers who simply verify their information for sales representatives have authorized the purchase of the listing and directory. Ambus allegedly also failed to honor money-back guarantees. The defendants agreed to halt calls to American consumers and to suspend collecting on accounts predating the lawsuit. The FTC worked with the Canadian Competition Bureau and Alberta Government Services in investigating this case and filing the complaint.
The Boston U.S. Attorney's case against the seven individual Quebec defendants alleges that the telemarketing fraud targeted U.S. senior citizens. Specifically, the telemarketers were said to have falsely stated that the consumer had won a substantial (often multi-million dollar) lottery or sweepstakes. Posing as representatives of the Nevada Gaming Control Board, defendants' telemarketers convinced consumers they would receive the prize money only by pre-paying specious taxes and other charges. None of the consumers ever received any lottery or sweepstakes winnings. "This case is part of a continuing pattern of fraudulent schemes in which Canadian telemarketers prey upon our most vulnerable citizens," said U.S. Attorney Sullivan in a press statement. Defendants were charged in a grand jury indictment with conspiracy and mail and wire fraud, and face up to 20-year sentences, followed by 5 years of supervised release, and a $250,000 fine. The U.S. Attorney was aided in the investigation by members of "Project Colt," a cross-border task force that combines members of the Royal Canadian Mounted Police, the Surete du Quebec, the Montreal City Police Department, the Federal Bureau of Investigation, the U.S. Bureau of Immigration and Customs Enforcement, and the U.S. Postal Inspection Service.
Why This Matters: American prosecutors have learned that cross-border telemarketing fraud can originate from nearly any nation on earth. While most of those off-shore locations present significant prosecution challenges to U.S. law enforcement, our friendship and cooperation with Canada allows American prosecutors some cross-border success stories.