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TELEMARKETING FRAUD

OBJECTIVES
To reduce the amount of economic loss by national and international telemarketing fraud throughout the United States.

Telemarketing fraud continues to grow and has been estimated by numerous government agencies to cost $40 billion annually and victimize millions of people. One case in Nevada involved 800,000 victims. The telemarketing industry employs over 3.4 million people, and industry estimates place total consumer spending through telemarketing at $500 billion per year. 

Telemarketing fraud and other fraud by wire matters can be very difficult  crimes to investigate. Typically, individuals committing fraud by wire use multiple aliases, telephones, mail drops, and business locations. They can change their method of solicitation, product line, and other recognizable traits overnight. Their operations are mobile and their schemes are complex. Criminal intent is often difficult to prove, and the majority of individual losses are under prospective thresholds. The elderly population is particularly targeted and susceptible to telemarketers. 

Fraud by wire, especially telemarketing fraud, has become an increasingly international crime problem. Telemarketers are moving their operations in response to the law enforcement efforts within the United States. During a visit to Canada, United States Attorney General Reno commented to the Solicitor General of Canada about the scourge of telemarketing crime, and noted that Canada appears to have a vast number of fraudsters preying on Americans. The most egregious fraudulent pitches that are currently being used to victimize American citizens are coming from Canada. The National Fraud Information Center stated in 1996 that one-half of complaints received come from Canadian telemarketing companies. A Canadian crime survey is currently being completed to assess the entire scope of the problem.  The problems of investigating, prosecuting, and extraditing Canadian telemarketers are multifaceted. 

Telemarketing fraud is not a new crime to law enforcement, but never before has it been used so prolifically to target our elderly citizens. The FBI's analysis of this crime problem revealed, tragically, that the illegal telemarketers continue to prey in large measure on older Americans, those who may be least able to recover from losses. It is, therefore, imperative that the FBI aggressively pursue telemarketing investigations and be ever vigilant in efforts to identify perpetrators and protect citizens from these financial predators.

STRATEGY
The FBI's strategy to combat fraud-by-wire offenses concentrates on the areas where the greatest potential for egregious fraud and abuse lie in the future. These areas are: 

  • international telemarketing fraud outside the FBI's jurisdiction, particularly in Canada; 

  • domestic telemarketing fraud against senior citizens; 

  • promotion of fraud prevention initiatives; and 

  • maintenance of fraudulent telemarketing intelligence database.

To combat fraud in these areas, the FBI developed a joint initiative with Canadian law enforcement to combat telemarketing fraud emanating from Canada. FBI Agents travel into Canada to assist in preparing criminal cases, as well as using the National Tape Library (NTL) as an intelligence tool to track down fraud committed against senior citizens. In addition, the FBI is pursuing an increase in the number of telemarketing fraud convictions through increased coordinated state and federal investigations and prosecutions. 

ACCOMPLISHMENTS

TELEMARKETING PROSECUTIONS

OPERATION SUBJECTS CASES
OPERATION DISCONNECT 402 65
OPERATION SENIOR SENTINEL (12/95) 598 180
OPERATION DOUBLE BARREL (7/96 11/98) 787 210
OPERATION DOUBLE BARREL 
takedown day (60 days)
139 48
TOTAL DOUBLE BARREL 926 258
TOTAL SENIOR SENTINEL & DOUBLE BARREL 1524 438
TOTAL TELEMARKETING 1926 503

 

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