Old and lonely, Mabel Smith sat in her Denver apartment, looking forward to the telephone calls from her "friends"--those sweet young people who would inform her about the wonderful prizes coming her way.
"You've won a car, Mabel!" "Mabel, you're the winner of our $20,000 grand prize!" "You've been selected, Mabel, to receive a free trip..."
They were so nice. Some would call her and chat for hours, inquiring about her health, her family, her hobbies. One man even wrote letters telling her that she was his "very best friend" and that he "just wanted to make sure that she was doing well." And all she had to do was write checks--"to cover income taxes" or "for our handling fees"--of $400, $500, $600.
At 89 years old, Mabel never questioned how she came to be so lucky or why so many people she had never met seemed to know so much about her. Nor did she ask why she never received the guaranteed grand prize. She just accepted the boxes of pen sets, the cheap vacuum cleaners, the air purifiers and tacky artwork and eagerly anticipated the next telephone call, her checkbook at the ready.
For a year up to this spring, Mabel Smith wrote checks totaling almost $250,000 to forty different telemarketing companies. Finally, she mentioned these nice callers to a family member, who looked into her finances and, horrified, contacted the state attorney general and the Denver district attorney. Unfortunately, neither may be able to do much.
Federal law enforcement agencies estimate the amount lost to telemarketing and direct-mail scams at $40 billion a year, according to Jan Zavislan, the first assistant attorney general. Eighty to ninety percent of the victims are elderly, most of them women. And the cases are extremely difficult to prosecute.
"It is a huge, huge problem," Zavislan says. "We have hundreds of cases where the victim spent every penny of their life savings on these scams."
Although the amount of money wasted by Mabel Smith (an pseudonym used to protect the woman from the next con man) was extraordinary, she is typical of the victims of a sudden influx of telephone scams that came to the attention of the Denver district attorney this spring, says Brad Uyemura, an investigator for the office. She is elderly, living alone, tends to take people at their word and responds to requests for money.
Clerks at the district attorney's office note not just an increase in numbers of complaints, but a trend toward a new scam called recovery rooms.
"You get a guy who calls up and says, `We understand you have been the victim of unscrupulous telephone solicitors, and we're working with local law enforcement to get your money back,'" Uyemura says. "Of course they want more money to cover their expenses.
"Recovery rooms are particularly galling to law enforcement because we don't charge people to get their money back. And these people are using the same lists of people they already victimized under another guise."
People get on the lists by responding to those little pastel postcards informing the addressee that he or she has won one of several prizes. All the person has to do is fill in the demographic data, select a prize and send it in. Companies compile the information and sell it to anyone at the going rate of a nickel a name. Some telemarketers who buy the lists are legitimate--such as magazine subscription salesmen and credit card companies--but others are con artists.
Uyemura says those unscrupulous telemarketers even share or sell the names of easy touches, which is why someone like Mabel Smith will be contacted by so many different scamsters. Another woman who came to the district attorney's attention this spring wrote more than 500 checks over slightly more than a year to various sweepstakes contest scams.
Zavislan says the amounts requested are often small--$5, $10, $15. "The first time they ask for $5 and ask you to answer a simple question, so that to the victim it's a `contest,' not a game of chance," he says. "Then they send a card announcing that you've made it to the second round and ask for another $5. Then you're told that you're a finalist and please send $15. Next, you're tied for the grand prize and please send another $15.
"And, of course, no one ever wins the prize."
Sending money will place the victim on a "hot list," a guaranteed bombardment of mail and telephone calls. "Heaven forbid you send them any money," says Uyemura. "Do that and they're your friends for life."
Often the requests are generated by a single scam artist operating dozens of companies under different names. "We've had people show us hundreds of pieces of mail they've received in a single month," Zavislan says. "One elderly woman in Aurora sent $1,000 in a month, all in $5 and $10 increments."
In the past two years, the attorney general has shut down 34 telemarketing companies operating out of Denver and Colorado Springs.
The Denver district attorney prosecuted a half-dozen of the cases. One that stood out to Uyemura was the Christian Values Clearinghouse, "because they would tell people, `We wouldn't lie to you. We're a Christian organization.'" Prosecuted were the husband-and-wife team of Howard and Roberta Viveney, as well as Dan Ralph and Malcolm Hunt. Roberta Viveney received a deferred judgment, meaning she must complete a probation period; Howard Viveney and Ralph pleaded guilty to felony theft of more than $15,000, were placed on probation and ordered to pay restitution. Hunt failed to appear for sentencing but was apprehended by Texas law enforcement officials last week and may be extradited to Colorado. Another busted operation was run by Ingo Rewald, who is serving an eight-year sentence in North Dakota for a similar offense committed there.
"Unfortunately, you rarely see someone sent to prison for a white-collar, economic crime," Uyemura says. The con men pay restitution as a sort of cost of doing business and then move on. Because other victims are often too embarrassed to step forward or may not even realize that they've been ripped off, he adds, restitution represents a small fraction of what the con men make.
Uyemura and Zavislan agree that the current concern in Denver is out-of-state outfits that prey on Colorado citizens. The hotspots for boiler room operations are Buffalo, Los Angeles, Las Vegas, Atlanta and various Florida cities.
The telemarketing con men avoid calling people in the states where their "boiler rooms" (phone banks) are set up, well aware that by placing all of their calls to other states, they blur the line of who has legal jurisdiction.
"Who prosecutes the case?" Uyemura says. "The place where the telephone is or the place where the victim is?"
Prosecution is difficult for other reasons, too. Resources are tight everywhere, Zavislan notes, "and flying in a bunch of elderly people from another state for a local criminal or civil trial usually isn't a priority." Also, the perpetrators rarely give their real names to the victims; their company names are usually fronts with many buffers between victim and con man, and their addresses are just mail drops.
The con men have several reasons for preying on the elderly. Among them is the sad fact that memory problems may prevent the victims from recalling the specific promises or representations made to them. Fiercely independent, many elderly people are too embarrassed to admit to friends and family that they have been duped.
"The more cynical know that by scamming someone who is 92 or 94 years old, by the time they are caught and a case is made, the chances of our finding the witness still alive are slim," Zavislan says.
The attorney general tries to get restitution for people like Mabel Smith, says Zavislan, but with little success, and attorney generals from all fifty states have formed a working group to address the problem.
"We've been trying to get other states as well as federal agencies like the Federal Trade Commission to get involved in prosecuting these people," Zavislan says. "But I have to admit, so far cooperation has been limited.
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