Operation
Disconnect
Senior
Sentinel
Double
Barrel
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In 1993, the
FBI unveiled Operation DISCONNECT (1990-93), a national covert
investigative effort aggressively targeting telemarketing fraud.
DISCONNECT was developed as an innovative and unique approach
to address Salt Lake City's identified telemarketing crime problem.
This operation was designed to allow undercover FBI Agents to
engage in direct conversations with the owners and operators
of identified illegal telemarketing operations. During the conversations,
the operators discussed explicitly how they conducted their illegal
business. The undercover scenario proved to be so effective that
similar undercover operations were initiated in a number of other
FBI field offices around the country. At its conclusion, DISCONNECT
encompassed 18 FBI field offices and was the most ambitious investigative
initiative countering illegal telemarketing operations.
An essential
feature of the undercover scenario centered around undercover
FBI Agents visiting the owners of illegal telemarketing operations
and representing themselves as salesmen of a company which leased
a "one-of-a-kind" computerized automatic dialing system.
This equipment was advertised by the undercover Agents as a method
to dramatically reduce the telemarketer's operating costs and
increase their incoming phone calls, thereby generating additional
profits for the operation.
The undercover
scenario continued with the undercover Agents designing a recorded
sales pitch that was customized for that particular telemarketing
operation. In order to develop the "pitch," knowledge
of the operation was essential. The owners and operators disclosed
that they were in the business to defraud people. The recorded
sales pitch, which was developed after interviews with the owners
and operators, would be installed in the computerized dialing
equipment and used to promote the telemarketer's operation. The
undercover Agents arranged for a test of this customized recorded
sales pitch in order to demonstrate its effectiveness. The test
results were quite successful with a number of "consumers"
purchasing the product.
Based upon the
success of the test, the owners of the telemarketing operation
were so impressed that they expressed their interest in having
the system installed. The telemarketers were unaware, however,
that the sales pitch was never reduced to a recording nor was
the dialing equipment ever activated. At a prearranged time,
other FBI Agents, posing as customers, made the "return"
phone calls to the telemarketing sales personnel. The lure of
quick illegal profits, in this instance, proved to be the undoing
of these operations.
The success of
DISCONNECT was based largely upon the use of recorded "pitches"
as evidence against the telemarketers. DISCONNECT resulted in
the indictment and conviction of 402 subjects, execution of 101
search warrants, seizure of $7.65 million worth of property and
forfeiture of $6.76 million.
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SENIOR SENTINEL
(1993-95) began as an innovative way to obtain tape recordings
of fraudulent telemarketers' pitches utilizing citizen volunteers.
At the outset of SENIOR SENTINEL, the Iowa Attorney General's
staff transferred the telephone numbers of telemarketing fraud
victims to their office. Staff, posing as elderly victims, answered
these numbers and recorded the conversations. Fraudulent telemarketing
calls immediately flooded these phone lines, and the staff obtained
irrefutable evidence of misrepresentations made during those
calls. Iowa's telemarketing fraud enforcement program proved
so successful that search warrants executed on illegal boiler
rooms throughout the United States repeatedly uncover instructions
to fraudulent telemarketers not to call into Iowa. BI then replicated Iowa's taping program on a national
scale. Undercover Agents and citizen volunteers, many of whom
were referred by the American Association of Retired Persons
(AARP), set up and staffed telephone lines. Telemarketers would
contact the volunteers, believing that they were soliciting people
whom other telemarketing schemes had previously victimized. Agents
and volunteers recorded these conversations in which the telemarketers
used false and misleading statements in soliciting funds from
the would-be "victims" to participate in the scams.
Investigators and prosecutors then used those recordings to prosecute
the telemarketers for various fraud offenses.
On December 7, 1995, United States Attorney General Janet
Reno announced the takedown of Operation Senior
Sentinel, in which 38 FBI field offices, 12 United States
Attorney's Offices, more than a dozen state attorneys general
offices, and the Fraud Section of the Criminal Division of the
Department of Justice had participated. As of July 31, 1996,
SENIOR SENTINEL had resulted in the conviction of 598 persons
for telemarketing fraud-related offenses, execution of 104 search
warrants, and the investigation of 180 telemarketing "boiler
rooms". Many federal and state telemarketing investigators
now commonly use the "SENIOR SENTINEL technique" to
obtain incriminating statements from unsuspecting con artists.
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As fraudulent
telemarketers have adopted multiple techniques to make it more
difficult to investigate and prosecute them successfully, law
enforcement has found it necessary not only to adopt innovative
investigative approaches, but also to join forces at all levels
of government. For several years, joint telemarketing task forces
have consisted of federal, state and local prosecutors and investigators.
One of the reasons
for the success of these local task forces is their ability to
take two approaches to prosecution. Under federal mail and wire
fraud statutes, and a number of state fraud statutes, prosecution
of fraudulent telemarketers may be conducted in either of two
possible venues. Prosecutions can occur where the fraudulent
"boiler room" is operating, known as "backyard"
venue prosecutions, or where the victims were defrauded, known
as "victim" venue prosecutions. Many states have also
enacted regulatory legislation that makes the telemarketers'
failure to comply with that legislation's requirements (e.g.,
registration and bonding) a criminal offense.
Operation DOUBLE BARREL
is a nationwide operation that combined the SENIOR
SENTINEL technique of consensual recordings, the increasing
willingness of federal and state authorities to work
together in combating telemarketing fraud and the
availability of "backyard" and "victim"
venue prosecution. DOUBLE BARREL involves the conduct
of simultaneous and coordinated federal and state
prosecutions of telemarketing boiler rooms. State
Attorneys General will prosecute victim venue cases
involving subjects of telemarketing fraud schemes,
relying primarily on the FBI's investigation of those
subjects in the location where they are operating.
FBI Agents conduct
their typical telemarketing investigations, trying to identify
victims from those states participating in the initiative. The
results of the investigations are forwarded to United States
Attorneys' offices and the state offices for coordination of
prosecutions. Thus, telemarketing schemes face federal prosecutions
involving backyard venue cases, and state prosecutions in victim
venue cases. Department of Justice policy permits the pursuit
of federal and state prosecutions against the same fraudulent
scheme in a manner consistent with constitutional protections
such as the Double Jeopardy Clause.
DOUBLE BARREL enables federal
and state authorities to coordinate the application
of their combined resources to have the maximum impact
on fraudulent telemarketing. Participating states
safeguard their citizenry with a greatly reduced burden
on their limited investigative resources. Federal
Agents and prosecutors also benefit from the enhanced
coordination and investigative contributions that
DOUBLE BARREL can provide in their investigations.
DOUBLE BARREL was publicly announced
on December 17, 1998. The FBI expects that the operation
will continue to provide invaluable intelligence about
how illegal telemarketing operations function, including
the methods of operation and the means of avoiding
law enforcement detection and prosecution. This intelligence
will assist law enforcement and regulatory agencies
in combating this crime problem in the future. Ultimately,
law enforcement authorities hope that DOUBLE BARREL
will also serve to deter telemarketers from contacting
victims in states participating in this initiative.
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