Tuesday, March 8, 2016

My Crime Beat Column: Consumer Beware, Postal Inspector Warns Of Mail Fraud And Crooked Schemes

The below column appeared in the South Philadelphia American in August of 1997:

"Congratulations! You've just won the National Sweepstakes for one million dollars!"

Well, maybe not.

You see, the caller who just informed you over the telephone that you'll soon be a millionaire added subtlety that you will be required to mail in an advance fee of of $5,000 for "administrative costs."

I ventured over to the U.S. Postal Inspection Service's Bala Cynwyd offices to discuss this type of fraud with Tony Wolchasty, a postal inspector, and Judy Starliper, the Philadelphia Division's public information officer and forfeiture specialist.

"Mail fraud is a scheme to defraud an individual or a business using the U.S. Mail to carry out the scheme," Wolchasty said.

Wolchasty went on to explain that a change in the law now includes mail carried by Federal Express, UPS and other private firms. The law was amended because criminals were using the private companies to circumvent the law.

Mail fraud is the oldest consumer protection law in the U.S. and is one of the most effective tools in fighting white collar and organized crime. Millions of dollars are lost each year through mail fraud, which cheats not only the poor and the elderly, but also business people and the consumer as well. Prevalent schemes include insurance, banking, false billings and advance-fee selling swindles; charity schemes, promotions of fake health cures, franchise schemes, beauty devices, fast-working diets and sex stimulants; chain letters, lotteries, and solicitations for the sale of advertising specialty items.

Wolchasty has been a postal inspector for more than 25 years. He works on a fraud team with three other inspectors who investigate complaints from businesses, consumers, and organizations like the Better Business Bureau.

"There are myriad schemes out there and it all depends on the ingenuity and resourcefulness of the promoter," Wolchasty explained. "You have the common schemes, what we call your "work at home" schemes an chain letters. We also have more sophisticated schemes involving investments of thousands and millions of dollars."

Wolchasty said frauds against businesses include "false billings" schemes where a business gets a bill for a product or a service that was never rendered or provided, but the bill is paid anyway because the small amount of money. With a mass mailing, enough companies pay to make it a very profitable scheme,

"Boiler Room" schemes are when you have a room full of telephone operators pitching schemes. Wolchasty said they started out in boiler room basements, hence the name, but today they operate in large office complexes. Senior citizens are the most vulnerable victims.

"These people are so good, they make you believe you really won something. But if someone says you won something and asks you to pay expenses, you should automatically know it's not going to be legitimate," Starliper said.

"No matter how enticing it is, think about what was just proposed," Wolchasty added. "The caller will say that what's coming to you will be more than enough to offset this small amount of money you'll have to pay up front. Let the buyer beware. If you don't know who you are dealing with, don't deal with them."

Wolchasty spoke of one case where a company promised people they were getting cash bonuses and all they had to do was send in money for taxes, shipping and handling and other associated fees.

"People from all around the country bought into this and sent this company over $600,000 in a space of seven months. Then the company completely shut down. We were able to catch up to them and all of them pleaded guilty," Wolchasty said. "They were fairly sophisticated. They worked with "lead brokers" who sell lists of names, addresses, phone numbers and the amount of money sent to promotions in the past. If they gave three thousand, the pitch person will call and ask for a thousand an probably get it."

Who could be victimized twice, I asked? Wolchasty replied that some people are victimized twice and more.                           
"Seniors are predominantly the victims in these cases. They grew up at a time where their word was gold. These people may have problems or a death in the family an this call comes at that inopportune time when they could use some extra money. The con artists are on the phone for hours getting their confidence, building a rapport, and maybe they are the only person they have talked to on the phone in months."

As the forfeiture specialist, Starliper handles the property seized from criminal cases. The 18-year Inspection Service veteran said the forfeiture funds are used for law enforcement's fight against crime. Starliper spoke of a major restitution case she worked involving 22,000 people.

"I was contacted by family members who had no idea that their loved one had been taken." Starliper said. "I advise those with elderly relatives to check their mail and see who they are sending money to."

Wolchasty added that one should keep copies of the advertisements and any literature and envelopes used in a scam. And don't give out your bank account number or Social Security number.

"If someone wants to file a complaint, go to your local Post Office and they'll direct you to the Postal Inspection Service," Starliper said. "You can also call 895-8450 or 1-800-FRAUDIS."

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