U.S. and Foreign Law Enforecement Agencies Join Forces Against Mass-Marketing Fraud

June 1st, 2010
Tracy Russo

Mass-marketing fraud is a global problem that can cause individuals to lose thousands and even millions of dollars. Mass-marketing fraud schemes target individuals of all ages and walks of life. Victims are lured with false promises of significant cash prizes, goods and services in exchange for up-front fees, taxes or donations.

Today, law enforcement and consumer protection agencies in the United States and around the world are making efforts to raise awareness about mass-marketing fraud.

Mass-marketing fraud can take many forms. What these schemes have in common is the use of one or more mass communication method such as the Internet, telephones, the mail or mass meetings in person.

Since Oct. 1, 2009, the Department of Justice has charged 80 defendants in 53 mass-marketing fraud prosecutions in 27 judicial districts. These cases demonstrate the wide variety of mass-marketing fraud schemes, which increasingly operate from and affect multiple jurisdictions around the world. These cases involved fraud losses totaling more than $497.6 million.

For example, last week the U.S. Attorney’s Office for the Southern District of Illinois charged an individual for allegedly engaging in an international Ponzi scheme that was operated through a website. The scheme allegedly resulted in a total of $70 million in losses to more than 40,000 investors in more than 120 countries. (link to SDIL press release)

In Los Angeles today, the FBI, in partnership with the U.S. Attorney’s Office for the Central District of California, the U.S. Postal Inspection Service (USPIS), the Federal Trade Commission (FTC) and the Royal Canadian Mounted Police, will hold an event to educate consumers on how to recognize and avoid mass-marketing fraud schemes.

The FBI, in addition to its investigative efforts, posts consumer information about mass-marketing fraud on its website at www.fbi.gov. This week’s Inside the FBI podcast features an interview with a mass-marketing fraud victim who lost her retirement savings.

USPIS announced that the Universal Postal Union (UPU), a specialized United Nations agency for international cooperation between postal services, is today rolling out a worldwide public education campaign against mass-marketing fraud.

The National Intellectual Property Rights Coordination Center (IPR) Center is working to combat mass-marketing fraud with Operation Stamp Out, an operation that began in February 2009, to stop the importation and distribution of counterfeit monetary instruments, counterfeit U.S. Postal money orders, stamps and meter stamps into the United States.

Operation Stamp Out combines the expertise of specific areas of U.S. Immigration and Customs Enforcement (ICE), U.S. Customs and Border Protection (CBP) and the U.S. Postal Service. As of March 2010, CBP and ICE, both members of the IPR Center, have conducted seizures of more than 36,000 counterfeit financial instruments with a retail value of more than $12 billion.

The FTC, in its efforts to raise awareness about mass-marketing fraud, just recently issued a new consumer brochure on how individuals can avoid fraud.

More information about common mass-marketing fraud schemes and how to avoid becoming a victim of mass-marketing fraud can be found at the Department of Justice’s website or at the Financial Fraud Enforcement Task Force website at www.stopfraud.gov.

Today’s efforts to raise public awareness about mass-marketing fraud are part of a multinational day of action against mass-marketing fraud. Authorities in Australia, Canada, the Netherlands and the United Kingdom are also raising awareness in their respective countries.