By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
By Jeff Balke
By Angelica Leicht
Sometimes, this works out brilliantly. An eight-month investigation by Project COLT resulted in the arrests last December of 40 alleged scammers — all Canadian citizens. Two hundred Canadian police officers had raided 50 boiler rooms, mostly in Montreal, where authorities say telemarketers ran government-grant and lottery scams.
This investigation is the feather in Project COLT's cap — an example of why U.S. Immigration and Customs Enforcement officials call the task force "a model for effective international law enforcement cooperation." Since Project COLT's 1998 inception, according to ICE, the task force's investigations have led to 1,215 indictments and the recovery of $15 million.
Yet, a closer look at these numbers reveals that Project COLT might need to wait a minute before patting itself on the back.
Using ICE's own estimation of telemarketing fraud costing $700 million a year, scammers have reaped $6.3 billion in Project COLT's lifetime. Which means this particular "model for effective international law enforcement cooperation" has recovered exactly two-hundredths of 1 percent of the money ripped off of U.S. consumers and businesses.
Part of this might be because there really isn't as much "cooperation" as Project COLT agencies give themselves credit for. Vermont Attorney General William Sorrell appears to be the only official to publicly address what he calls the task force's "hurdles to effective investigation and prosecution."
Testifying before a Senate subcommittee in 2001, Sorrel related the sad condition of extraditing indicted defendants from Canada to the United States. Citing "anecdotal information from law enforcement," Sorrell said it can take two years or longer to extradite a defendant.
"In an attempt to verify our anecdotal information," Sorrell said, "we asked the Department of Justice and the Federal Trade Commission for the average processing times for requests for [extradition assistance]. They were unable to give us that information readily, and as far as they know, they do not currently collect it."
Moreover, Sorrell alleged that his own investigators have had trouble getting information from Canadian authorities to bolster their cases.
"Our investigators and prosecutors have been stymied in their attempts to effectively investigate and prosecute these crimes," Sorrell said. "Canadian investigators frequently tell us that they do not have the resources to answer states' requests for investigative information, even if that information may be in existing files and computers."
Sorrell also lamented Project COLT's method of only working one major case at a time. "The effect is that many cases with U.S. victims are not being investigated and prosecuted at anything approaching the rate they should be, even while states like Vermont stand ready to prosecute Canadian telemarketing criminals."
All of which should be reassuring to the people behind MGR Solutions.
If Barry Wisnevitz at U.S. Global Mail takes an active role in making sure his customers aren't scammers, David Batrick might be considered the anti-Wisnevitz.
Batrick does brisk business with his company Nevada Corporation Services, which sets up corporate status for small business owners both inside and outside Nevada. In the proud tradition of gambling and legalized prostitution, Nevada also offers the ability to incorporate without ever publicly revealing the owner's name.
Many states, including Texas, require a corporation to disclose the names of its officers and directors, but Nevada allows a "nominee manager" option, which allows a person to list the name of a fake management company, rather than its actual director and officers.
For some reason, this interested the people behind MGR Solutions, who incorporated through Batrick and took the nominee manager option, thus making Silver State Management Services the manager of MGR Solutions. As entitled by Nevada law, Batrick is Silver State Management's director, president, treasurer and secretary.
This arrangement also attracted a company called Inner Concepts Inc., which launched a massive e-mail campaign last year offering free tickets to a taping of Oprah. All the Oprahphiles had to do was take a survey, which included giving personal information, and buy some products from the businesses Inner Concepts was pimping. Many Oprah fans were disappointed to find out they'd been duped.
Another company to hire the services of the make-believe Silver State Management was OneSource Financial, which purported to sell ATMs but disappeared after securities authorities in California and Colorado issued cease-and-desist orders to the company for allegedly misleading investors.
Batrick says he terminated OneSource's services — when he received a copy of one of the cease-and-desist orders. In fact, it takes quite a bit for Batrick to sever ties with one of his clients.
"We do this as a professional business," he says. "We're not scamming anybody. Those are our clients. And if the district attorney feels that it's got to a point where they need to stop that company, they'll issue a subpoena [to see Batrick's files], find out who they are and stop them."
Batrick assured the Houston Press that there was no link between Inner Concepts, OneSource Financial and MGR Solutions.
"I can tell you that I don't see any common ownership in any of these companies," he says. "These are just basically coincidences that [these] people are using our services."
Either Batrick lost his patience with questions from the Press, or he just naturally ends conversations by saying, "Put it in writing from your attorney if you have additional questions, please" and hanging up.