International Telemarketing Scam

It is being reported that a plea agreement is near completion with one of two people charged in Seattle with operating an international telemarketing scam out of Vancouver, Canada.^[1] The scheme involved the two men writing to elderly people in the United States and Great Britain, and telling them that they had won a foreign lottery but would have to pay upfront fees to collect the winnings.^[2] The two men are in Canada, awaiting extradition hearings.

This case, involving Bruce and Stephen Ironside, is considered a very significant transnational crime.^[3] According to the FBI, the two brothers caused losses of over $2 million.^[4] In October 2003, they were arrested on federal charges of violating 18 U.S.C. §§ 1302, 1343, and 2326, and were indicted in the Central District of California.^[5] The brothers are also the subject of a Federal Trade Commission lawsuit brought in a civil case in the Western District of Washington.^[6]

Mailing Materials Related to Lotteries
Under 18 U.S.C. § 1302, it is a crime for a person to send in the mail anything that concerns a lottery or similar scheme that offers prizes that are dependent in whole or in part upon lot or chance.

Violating section 1302 can result in a fine, imprisonment for up to five years, or both.

Wire Fraud
We have previously discussed 18 U.S.C. § 1343, the wire fraud statute, in connection with Alexander Yakovlev, here.

Telemarketing Fraud Against the Elderly
18 U.S.C. § 2326 states that a person who is convicted of 18 U.S.C. § 1343 in connection with a telemarketing scheme will be imprisoned for up to five years in addition to the penalty levied under section 1343.^[7] However, if the scheme victimized ten or more people over the age of 55,^[8] or if the scheme targeted people over the age of 55,^[9] that person can be punished by up to 10 years in prison in addition to any punishment levied under section 1343.^[10]

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[1] Plea Deal Reported for One of Two Brothers in Telemarketing Case, Seattle Post-Intelligencer, Aug. 17, 2005, available here.
[2] Id.
[3] Federal Bureau of Investigation, Financial Crimes Report to the Public G6 (2005), available here (PDF).
[4] Id.
[5] Id.
[6] Federal Trade Commission, Press Release: Cross-Border Con: FTC and Canadian Authorities Shut Down Telemarketers Calling Foreign Lottery “Winners”, Oct. 29, 2003, available here.
[7] 18 U.S.C. § 2326(1).
[8] Id. § 2326(2)(A).
[9] Id. § 2326(2)(B).
[10] Id. § 2326(2).