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Project COLT - Fraudulent Telemarketing
Project COLT is a joint forces operation involving the Montreal Urban Community Police, the Sûreté du Québec and the RCMP. This investigative group will combat fraudulent telemarketing organizations based in the greater Montreal area. It is a threefold initiative which includes a proactive prevention program involving private courier companies. The other two methods are the classic fraud investigation which is by nature multi-jurisdictional and secondly the assistance to American law enforcement counterparts in order to conclude as many extraditions as possible in these fraudulent telemarketing cases.
Montreal, has the largest number of illegal telemarketing boiler rooms in Canada. We approached the two other law-enforcement agencies(MUCPD & SQ) in order to unite our resources and be able to effectively combat these organizations in their illegal operations. According to statistics, these groups were generating between 60 and 70 million dollars profit a year. Hundreds of complaints from US and Canadian victims were being treated by the three police agencies. In 1995 the RCMP approached various private courier companies and solicited their cooperation for the interception of monies and checks coming from scammed victims all over North America.
The crime of telemarketing fraud is treated by the judicial system as a white collar crime described in Section 380 of the Canadian Criminal Code. This offence being considered a non violent crime unfortunately does not concur with fraudulent telemarketing operations as they presently exist here in Montreal. These criminals are victimizing the elderly, who are being robbed of their life savings because they listen and believe the scammers that they have won the "jackpot".
Project COLT's principal objective is to destabilize as much as possible the illegal telemarketing operations in Montreal. This is accomplished by a strategy which is threefold. The first being regular investigative work such as search, seizure and arrests of the scammers working the illegal boiler room operations. Secondly by assisting the US authorities in their investigations in order to conclude as many extradition cases as possible. Thirdly comes the disruptive prevention program which involves the cooperation of the private courier companies for the interception of mail containing the victim's money (certified cheques, money orders and cash).
As mentioned previously, Project COLT is composed of the three major police agencies in the province of Québec, the RCMP being the host agency, the Sûreté du Québec and the Montreal Urban Community Police Department. There is also a partnership that was developped with the US Customs Service, Internal Affairs, Chicago office. There will be a US Customs Internal Affairs agent seconded to Project COLT in Montreal for a trial period of 3 months. After evaluation there will be a second US Customs agent that will be seconded to Project COLT for a period of two years. Their roles will be to assist
Montreal investigators for all the US Customs agent impersonation schemes used by these criminal telemarketing groups.
Another very important partner is the designated provincial crown prosecutor who has been appointed to treat all telemarketing fraud cases presented by COLT investigators. Presently there are two cases before the courts and in the near future we should present five more cases. All these cases represent approximately forty-five people who will be accused of multiple fraud, conspiracy and money laundering charges.
The private sector partners include mostly courier companies. Their principle role is to intercept suspicious packages containing checks, money orders and cash. They report these interceptions to members of Project COLT who in turn confirm the nature and the purpose of the reported envelopes by calling the victims. All this is based on a mail drop list which is circulated to our partners. This list is revised weekly by Project COLT's street group who physically check out the addresses and often intercept and seize checks at these locations. These mail drops are often empty apartments where a hired person signs and collects mail for minimal wages paid by the fraudulent telemarketing organizations. There is over 200 active mail drops in the greater Montreal area alone.
There are sporadic partners who appear and disappear, such as Canadian Customs officers, Canada Post personnel, phone companies and banks. The reason for the relationship being sporadic all depends on how badly they need an investigator to get them out of trouble. Unfortunately it is often too late and the victim's money is long gone when we are called in.
During COLT's first year we returned 7.6 million dollars to 695 victims. A total of 63 victims were Canadian citizens and all the rest were US citizens. The average cheque is over 10,000 dollars according to these statistics. All these results are a direct product of the disruptive prevention program with the private courier companies. Our statistics also show a total fraud value of 21.5 million dollars in 1143 reported incidents for 1998.
On the investigative side of things, we executed a total of 34 searches. These include five illegal boiler room operations, bank accounts, phone companies, private residences, and currency counters. The cases before the Canadian courts have not given any results to this date.
There are nine extradition cases being worked on by the US authorities with the assistance of investigators from Project COLT. On the 11th of December 1998 the first Canadian to be extradited to the US, state of Illinois (Chicago) was transferred via Chicago US Marshall's office and US Customs Internal Affairs Chicago office. The individual, has pled guilty and offered his cooperation in exchange for a lighter prison sentence which should be announced in the near future.
4. We have approached the US Customs Service in order to have them second two agents to the Montreal JFO (COLT). This has materialized and will begin in mid-march of this year. We are making efforts to involve the Canadian phone companies to participate in the disruptive prevention program in order to terminate phone services used by the illegal telemarketing trade in Montreal.
Project COLT will be hiring students to help return calls to illegal telemarketing victims all over North America. These people are third-year Police Technology students at John Abbott College. With the help of a local contact, we were able to raise funding through a federal ministry, which being seed money for the moment, will permit us to pay reasonable wages to these students. This will benefit the JFO and also give the students a hands-on experience with real life victims in real-life situations.
Project COLT as a group is subdivided into three working units. During the upcoming year we will investigate thoroughly two major criminal telemarketing organizations. We have learned that searching illegal boiler rooms does not destabilize these groups on a long term basis. They are back in operation two weeks later. This is the main reason for developing the disruptive prevention program and also by better targeting our investigations. The last year has proven very fruitful, but in the upcoming year we will readjust our priorities with strategic analysis of all the information gathered by the members of COLT.
The evaluation of the general outcomes of Project COLT was done by the investigators. The major problem identified was the lengthy investigation (8 to 10 months) following the boiler room searches in order to submit a court brief and have charges laid before the courts. In other words we are losing the momentum and interest of all those concerned. As an example, the victims being elderly citizens often become disinterested in the case and simply refuse to testify because of the lengthy and complex investigation involved in proving the fraud case. The investigator is faced with a never-ending problem of finding cooperative witnesses who can offer testimony of a certain quality in the courtroom.
An evaluation was also performed by the NCO i/c accompanied by the OIC's of the three police agencies. There were human resource problems identified by the NCO i/c and a formal request was voiced to the MUCPD and the SQ in order to obtain one extra member from each agency involved with Project COLT. As for the operational difficulties, the same problem was identified, where in reality the complexity and length of fraud cases are often counterproductive.
The first and most important lesson learned is the quality of the contact with the telemarketing victims. These people are your most important resource and will be very helpful in identifying the scammers: modus operandi.
We must have the support and a firm commitment from the provincial crown's office in order to prosecute these criminals. We have learned that there may be a possibility of charging these illegal telemarketers with "fraud against the public in general" and also "conspiracy to defraud the public in general". This angle is being tried at the moment in one of our cases and gives the judge, who is presiding the case, a different outlook on this crime. In other words, instead of treating each victim as a separate fraud case, the crown presents the proof in a way that the picture is much more complete and demonstrates to the judge that the accused suspects are an organized group of criminals defrauding a large group of victims. Therefore the judge can visualize a crime that benefited the accused suspects of hundreds of thousands of dollars instead of only five thousand dollars as mentioned in our Canadian Criminal Code.
Developing partnerships with private courier companies, Canada Customs, Revenue Canada, Canada Post, phone companies and also US counterparts to all these groups is the most effective way to destabilize illegal organized telemarketing organizations.
Lastly, the media is a good alternative to enforcement work. They will gladly convey your message to their audience and it is the most effective way of reaching out to millions of potential victims.
We must treat illegal telemarketing as an "organized crime" activity and give it the same priority as drugs, smuggling or gambling.
Laurier Quesnel, S/Sgt.
NCO i/c, Project COLT
RCMP - Commercial Crime Section
4225 Dorchester West
Westmount, (Que)
H3Z 1V5
Phone: (514) 939-8304
Fax: (514) 939-8628
