GRAND TRAVERSE TRIAD NEWSLETTER

Editor: Officer Marjorie Marshall
Web Liaison: Michael Sheehan
In this Issue: 	
Scams: Phone Fraud, Living Trusts, Traveling Criminals, and more

BEWARE SCAMS

Phone Fraud

People 60 and over seem to be a favorite target for con artists who sell bogus products and services by phone, and this site attempts to help stop that. Clearly written, the page explains why older people are prone to these scams, what some of the common scams are, how you can tell a phony scheme when you hear one, and what you can do to protect yourself

A service of the federal government's FirstGov for Seniors, the site also has connections to other pages of interest to the older population. Some excerpts follow.

TIP-OFFS TO PHONE FRAUD

Telephone con artists spend a lot of time polishing their "lines" to get you to buy. You may hear this:

If you hear these-or similar-"lines" from a telephone salesperson, just say "no thank you," and hang up the phone.

WHAT YOU CAN DO TO PROTECT YOURSELF

It's very difficult to get your money back if youve been cheated over the phone, Before you buy anything by telephone, remember

RED FLAG WARNING CONCERNING LIVING TRUSTS

Financial planning groups are targeting seniors 50 & older to attend a free financial planning seminar. They use high-pressure scare tactics to discourage the preparation of wills and encourage the sale of living trusts. Watch for promotional materials that:

You may be targeted by a phone call, a flyer in the mail, an announcement in your local newspaper, or an invitation to a free seminar at a library, restaurant, senior center, or other public place. Seniors complete a contact card, expecting to receive information in the mail. Instead they receive a call to schedule an appointment in their home. Instead of competent financial or legal advice, they get a salesperson selling inferior, risky, or unnecessary products. The latest tactic is a door-to-door campaign including one where individuals are sold coupon books with free consultation offered.

Be wary if you receive materials that mention a report published by AARP. AARP does not endorse or sell trusts, or promote the sale of estate planning services. AARP has not authorized the use of its name to salespersons.

Marketing representatives are charging approximately $2,000 for a standard, nonspecific trust. They may try to fund the trust by the sale of annuities. While living trusts are appropriate and necessary for some, seek a trusted financial planner or attorney if you think you need one.

AARP urges you to become an informed, wise consumer. If you need more information, please contact one of the AARP representatives listed below:

Irma Swantner, AARP Consumer Affairs Specialist
(313) 563-3200 or e-mail: turtling@dhol.com

Anita Salustro, AARP Community Organizer
(517) 267-8913 or e-mail: asalustro@aarp.org

You may also contact the Office of the Attorney General at 1-877-765-8388

TRAVELING CRIMINALS

They are only hours away from northwestern Michigan. I refer to traveling scam artists, which refers to this element as the "Travelers." An article appeared in the Grand Rapids Press 5/15/00 relating the story of an 80 year old woman who let two nice-looking young men into her home near Holland telling her that her roof needed repairs, They then stole checks, cashing one for $1,000, and cutting her phone lines. Unfortunately, this is not an isolated incident as law enforcement officials are well aware of a certain
group of criminals known as "Travelers"' who travel throughout the United States targeting the elderly with various schemes.

Travelers are not restricted to any one section of the United States. Some travelers may prefer one particular section of the country to another based in part on certain factors such as amount of money made on previous activity; how much law enforcement pressure they may have received in a particular area; and weather conditions, The Grand Rapids Press article states approximately fifty-five such crime families reside near Skokie, Illinois, who earn $1 billion annually in their various schemes acting as painters, roofers and driveway sealers, to name just a few of their techniques, to separate the elderly from their money.

Rural elderly are the most sought after victims because they may live alone, are easily intimidated, make poor witnesses due to failing eyesight and memory capability, keep large sums of cash either on their person or in their homes and cannot physically make necessary home repairs or improvements.

These groups have developed many various scams over many generations and for each fraud and theft there may be different variations in structure and implementation. For example, victims may be approached by a person posing as a termite inspector offering a "free" inspection. Once inside the victim's home, money and jewelry will be stolen, The "inspector" may be accompanied by
a companion and while the victim is distracted, the companion will steal the valuables. Another variation of this scheme is the Traveler who will pose as a electrical wiring inspector, offering a "free" inspection.

Another scheme includes painting the barn, home, outbuildings, or mobile home roofs or attachments.. A cheap grade of paint, which has been further cut by kerosene, gasoline or other thinning agents, is used. After the job is completed, the traveler exaggerates the amount of paint required. If the victim balks, the traveler may use intimidation or threatens to call his attorney or even the police. Travelers also have been. known to acquire a well-known empty quality paint brand container and pour the poor quality paint inside of them and claim nothing but a high grade of paint is used.

A similar scam is also used with roof repair where the quality of the
material is misrepresented.

The driveway repair is another favorite scam. In most cases, the material used in asphalt paving consists primarily of reconditioned motor oil with a minimum amount of asphalt mixed in.

A unique scheme involves selling oak trees. The traveler will offer to sell young oak trees, plant, fertilize and water the trees as part of the purchase price. It is only after the Travelers have been gone for two or three days that the victim notices that all the trees are dying. On closer inspection, the victim discovers that he/she has purchased tree limbs that have been planted in potting soil and wrapped in a piece of burlap cloth. The traveler may also offer to prune trees at a
cost of $10.00. The victim assumes they mean $10.00 a tree, but when the bill is presented, the victim discovers the $10.00 represents each limb, not each tree.

Another scheme utilized is where Travelers will buy cheap tools directly from a manufacturer, triple the price and sell them either door to door, along busy highway interchanges and flea markets. In addition to tools, the Travelers will also sell motor jacks, lifters, hydraulic jacks, handsaws and drill presses.

The Travelers are also engaged in cheap rug sales. The rugs are
misrepresented as to quality. A variety of this scam requires that four Travelers be used. A distracter, who diverts the victims attention, two carriers (two Travelers hold up an open rug by the comers) and a fourth Traveler whose presence is unknown to the victim. The fourth Traveler is crouched behind the rug. The rug is carried open into the house; the distracter keeps the victim busy while the fourth Traveler (shielded by the rug) is able to survey rooms for money or other small valuables. If the victim decides to purchase the rug, the distracter tells the victim that the rug is a demonstrator model, but they have another just like it in the car.
In this way, the Travelers are able to smuggle the fourth man out of the house, unseen by the victim.

Other very profitable techniques are the Social Security and health scams. Though there are variations of these scams, one type involves two well-dressed Travelers posing as doctors working with the Social Security agency. They offer to give free physicals with the understanding that if the victim passes the examination, their Social Security benefits will be increased. While the doctor is conducting the phony exam, the assistant is going through the house stealing what he can.

In the other type of health scam, the Travelers pose as health department workers offering a free EKG (heart exam) for the elderly. At that point a phony heart machine with attachments is placed on the victim and the victim is told to lie still. During the so-called EKG, one Traveler stays with the victim while the other attempts to steal money and other valuables.

The above scams are only representations of numerous scams utilized by the Travelers to separate victims from their money and valuables. The best "rule of thumb" is to do business with businesses and persons you know and trust. If in doubt, call law enforcement authorities.

MORE SCAMS

Lenient penalties have made Canada a haven for con artists who run lottery, other scams

WASHINGTON (AP) - One of Canada's fastest-growing exports to the United States is telemarketing fraud, which takes in some $70 million a year mainly from elderly Americans.

In an operation called "Project Colt," agents from the U.S. Customs Service and the FBI have been working with the Royal Canadian Mounted Police and some local Canadian police forces to fight telephone seams.

So far, they have recovered and returned to victims about $12 million.

Officials say Canada has become a paradise for this kind of fraud because the penalties there, usually a fine or short prison term, are generally much lighter than in the United States, where offenders can be sentenced to five years in prison for each defrauded victim.

The perpetrators, mostly Canadians and some Americans, operate "boiler rooms" where hundreds of people make calls 16 hours a day, seven days a week. They often use lists of people who are widowed or have Alzheimer's disease. Officials say there are 40 to 50 boiler rooms operating in Montreal alone, the biggest Canadian center.

One of the largest phony lottery operations netted $120 million, said Robin Landis, a senior special agent for Customs Service in Washington.

Vancouver and Toronto also are host to many illicit operations, he said.

In a typical scheme, victims get a phone call telling them it is their lucky day, that they have won a lottery jackpot or other big prize. For the prize money to be released, they are told, they must pay a duty, tax or fee of several thousand dollars. They are asked to send a check or wire the money to a bank account or a postal box-- quickly, so they do not forfeit the prize money.

To make it look official, victims often are given phony award numbers and telephone numbers for contacting lottery officials.

In reality, Customs Service officials say, no duties are ever levied for claiming a foreign lottery prize or on money or checks moved across U.S. borders.

Sharon Hawkins' mother, a 75 year-old woman living in Tucson, Ariz., eventually sent close to $30,000 through Western Union after a man called and told her she had won $10 million in the Canadian lottery, although she had never played it.

Hawkins' mother, who did not want her first name used, cleaned out her checking account and took cash advances against her credit cards after getting several calls early last year.

"She wanted to believe them," Sharon Hawkins said in a telephone interview. "These people were just so nice."

Like many elderly people, her mother was susceptible to a friendly and sympathetic voice, said Sharon Hawkins, who contacted police.

"I was just horrified. I had no clue that she was so gullible," she said.

By asking victims to send the money through Western Union, the con artists can feel they can safely pick it up at any one of hundreds of offices.

Other frequent scams: offering loans to people who have had trouble getting credit, with a fee for the loan to be received; soliciting donations for phony charities; selling protection from fraudulent credit-card charges for a fee and obtaining victims' credit card numbers in the process; and selling investments in banking and real estate deals with promises of huge returns at little or no risk.

The lighter penalties in Canada for telemarketing fraud have led the Canadian Mounties to try to extradite suspects to the United States.

Sylvain L'Heureux, a constable in Montreal, can cite plenty of horror stories: the elderly California woman who lost $300,000; a victim fleeced of $63,000 who committed suicide soon after.

He believes the 1,800 complaints received by the Mounties may be "just the tip of the iceberg."

On the Net:

U.S. Customs Service:
http://www.customs.gov

Royal Canadian Mounted Police:
http://www.rcmp.ca

Examples of telemarketing fraud originating in Canada, according to the U.S. Customs Service:

LOTTERY SCAMS

Customs officers in November 1999 return two cashiers checks worth a total of $68,000 to an 83-year-old woman in La Jolla, Calif. Telemarketers had told her to send the money to pay for customs duties and taxes so she would be eligible to receive a $2 million Canadian lottery jackpot.

Customs and FBI agents in Los Angeles arrest two Canadians in November 1999 after they present a bogus $5.5 million check for a lottery prize to an 81-year-old woman at her home. They were asking her for $140,000 in taxes on the winnings.

U.S. and Canadian authorities arrest 25 people in a lottery prize scheme in February 2001 believed to have targeted 150 Americans a day, taking in about $7 million a month. Members of the group allegedly had posed over the phone as customs officers and Internal Revenue Service agents.

PHONY BONDS

Royal Canadian Mounted Police in January 2000 shut down a "boiler room" telemarketing operation in Vancouver, British Columbia, that sold phony British bonds to hundreds of American seniors. In a related move, the U.S. attorney in Seattle charges a company with fraud. The victims' names were on a "sucker list" of people who had previously been ripped off in other telemarketing schemes. 

CREDIT CARD SCAM:

The Denver chapter of the Better Business Bureau in April 2000 warns of a scam originating in Canada in which a company offers protection from fraudulent credit-card charges for a $300 fee, asking people for their credit card numbers in the process.

GEMSTONES FRAUD:

In April 2000, Canadian Brent Boyd pleads guilty in federal court in Vermont and is sentenced to 10 years in prison for his role in a gemstone telemarketing scam aimed at Americans. Authorities say scheme operators vastly overstated the gems' quality and value.

PHONY SWEEPSTAKES:

Customs issues a warning to Arizona residents in December 2000 after telephone con artists tell elderly residents they have won a sweepstakes in Canada and ask for money to cover customs duties.

Alaska residents get phone calls in March 2001 telling them they have won $250,000 in a Canadian sweepstakes and need to send $2,500 in taxes and duties to a Western Union account in Quebec. Customs officials and Alaska Attorney General Bruce Botelho issue a warning to state residents.

Back to Local Resources