Federal agents have seized more than $1 million from several local banks in connection with the arrests Thursday of 56 Utahns on fraud and money-laundering charges.
Agents seized the assets - including bank funds - of six local telemarketing companies and the 56 people who worked for them. Agents are still trying to seize several million more dollars from remaining accounts, said U.S. Attorney David Jordan.FBI agents here rounded up the 56 people as part of a national crackdown on telemarketing. "We have taken a major bite out of telemarketing fraud here in Utah," said Eugene Glenn, special agent in charge of the Salt Lake FBI office.
Jordan vowed to seek prison terms - in most cases a maximum of five years - for all those arrested.
More than 800 FBI and IRS agents arrested 240 people in 13 cities Thursday as part of the coordinated roundup. IRS agents accompanied by the FBI teams immediately seized the assets of those charged with the federal crimes.
The sting - called Operation Disconnect - began in Salt Lake City two years ago. FBI agents here used a sting of their own to get telemarketing operators to reveal their scams.
"This is the brainchild of the Salt Lake City FBI office and one of which they can justly be proud," Jordan said at a Thursday afternoon press conference.
Agents here created a company called Sunbelt Inc. The company - based in Atlanta - marketed a computer that agents said would dial up to 1,000 long-distance phone numbers an hour without a charge and make a computerized sales pitch.
The undercover agents contacted telemarketing companies they had received complaints about and offered to sell them the computer. They guaranteed that 30 percent of the people contacted by the computer would call back and ask to buy the telemarketers' products.
However, agents told telemarketers that in order to help them get the most out of the computer, telemarketers would have to outline their scams.
"We would ask them, `What do you say to the customer, what does the customer think you say and what is the truth?' " Glenn said. The companies then laid their schemes out for the undercover agents.
When the telemarketing companies tried to buy the computer - which doesn't work - the undercover agents would repeatedly postpone the sale. That was one reason the company was located in Atlanta, Glenn said. It was easier for agents to postpone the sale of the computer when they were selling it from across the country.
As many as 75 FBI agents and 40 staff worked on the operation.
The FBI simply scammed the scammers, Glenn said. "If you recall the movie `The Sting,' this is the same thing."
"The telemarketers were suspicious at first," Glenn said. "They thought this was too good to be true. This is Alice in Wonderland." The FBI's computer would save them the cost of direct mailing as well as the cost of long-distance calls.
"But then there was the element of greed. They thought, `what if this works and I don't get a piece of the action."'
Glenn called telemarketing a "vicious scheme."
He said, "These people prey on the elderly. Some have lost their entire life savings. There are a couple of instances where they have lost their homes. These people delight in finding someone who is vulnerable."
Thursday's arrest does not mean the end of telemarketing investigation in Utah or elsewhere. "We have found as much telemarketing fraud as we had time to deal with in every place we've gone," Jordan said. "We never exhausted the supply in any city we went to.
"There are thousands of Americans paying millions of dollars to these outright scams. But perhaps telemarketers will go on notice today that it will no longer be business as usual."
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Additional information
240 arrests likely
FBI Director William Sessions said Thursday in Washington that "Operation Disconnect," had identified 548 people involved in the illegal telemarketing schemes and that at least 240 of them are expected to be arrested.
"By the time this investigation is concluded, we expect to find victims in virtually every state in the union," Sessions said. "The tragic dimension is that the largest category of victims are the elderly, those who may be least able to recover from financial losses."
Besides Salt Lake City, the raids were conducted in Atlanta; Baltimore; Chicago; Dallas; Detroit; Houston; Las Vegas; Los Angeles; Phoenix; San Diego; New Orleans; Buffalo and Albany, N.Y.; Miami, Tampa and Jacksonville, Fla.; and Washington, D.C.