Telemarketing fraud, otherwise known as phone fraud, involves fraudulent solicitations and sales over the telephone with the intention of obtaining funds. The individuals behind these schemes tend to target the elderly and the economically disadvantaged, convincing their targets to reveal bank account and credit card numbers and other sensitive information over the phone.
Under NY Code Article 22-A (Consumer Protection from Deceptive Acts and Practices) Section 350-D, any person, firm, corporation, or association (or employees and agents thereof) who engage in telemarketing / phone fraud is liable to a civil penalty of up to $5,000 for each violation.
Because it robs Americans of millions of dollars on an annual basis, telemarketing fraud incurs harsh punishments, especially if prosecuted federally. Anyone charged with an offense involving this type of fraud needs to speak to a New York criminal defense attorney before making any kind of statement to law enforcement.
Under 18 U.S. Code § 2326, anyone who is convicted of an offense or a conspiracy to commit an offense in connection telemarketing can be imprisoned for a term of up to 5 years (in addition to any other applicable penalties). If they targeted victims over 55, an additional prison term of 10 years can apply. The court may also order that restitution be paid.
- Conspiracy to commit mail fraud
- Mail fraud
- Conspiracy to commit wire fraud
- Wire fraud
Mental disease / defect, false accusation, and proven lack of intent to knowingly commit an illegal act can all be presented as defenses. A defendant can also argue that their advertisement and approach complied with the rules and regulations of, and the statutes administered by the Federal Trade Commission or any official department, division, commission or agency of the state of New York.
In February 2014 Nadeisha Blake, Rashina Watson, Crystal Moss, Kimona Peterkin, Melissa Blake, and Sophia Blake were arrested for allegedly engaging in a lottery-type telemarketing scheme that defrauded elderly victims of over $400,000 between 2010 and March 2013. Victims were persuaded to send checks and cash to the defendants and their co-conspirators in Jamaica. Each defendant was charged with one count of conspiracy to commit mail and wire fraud, one substantive count of mail fraud, and one substantive count of wire fraud.
- Charity Fraud: This scam makes victims believe they are donating to a well-known charity or group. In some cases the charity represented does not even exist.
- Advance Fee Fraud: This common trick persuades victims to pay a token advance fee to collect a much larger cash prize they have supposedly won.
- Checking Account Fraud: The victim is convinced to let the scammers deposit counterfeit checks in his or her bank account. Once the check clears, the victim is asked to keep a percentage as a commission and wire the rest to another party. Days later the victim’s bank will freeze their account and leave them holding the bag.
- Pyramid Schemes: Con artists enroll victims in an unsustainable business model. An initial buy-in price promises a high return that never comes.