Department of Justice seal U.S. Department of Justice

Debra Wong Yang
United States Attorney
Central District of California


United States Courthouse
312 North Spring Street
Los Angeles, California 90012
PRESS RELEASE

FOR IMMEDIATE RELEASE
December 6, 2005
For Information, Contact Public Affairs
Thom Mrozek (213) 894-6947

THIRD DEFENDANT IN TELEMARKETING SCHEME PLEADS GUILTY TO OFFERING BOGUS INVESTMENT IN 'COLLECTIBLES'


Los Angeles, CA - On the day he was scheduled to go on trial, an El Monte man pleaded guilty today to federal fraud charges, admitting that he participated in a telemarketing scam that collected $3.5 million from primarily elderly victims who told they were investing in various "collectibles" that would be auctioned for huge profits.

Alonzo Narvaez, 26, pleaded guilty to one count of mail fraud and one count of wire fraud in the scheme related to the now-defunct West Coast Gallery in Covina, which operated from 2002 until early this year when it was shut down during the execution of a search warrant by the United States Postal Inspection Service.

Previously in this case, Geoffrey J. Gallagher, a 45-year-old Sierra Madre resident, pleaded guilty to one count of wire fraud. A third defendant, Richard Gilson, a 62-year-old Phelan resident, pleaded guilty to mail fraud.

West Coast Gallery was a telemarketing company that offered customers investments in collectibles, such as rare historical documents and celebrity memorabilia. West Coast Gallery purported to offer investments in inaugural memorabilia from Presidents Reagan and Kennedy, as well as hair cut from the heads of President Washington and Elvis Presley. Gilson was the business owner, and Narvaez, and Gallagher acted as "closers" who would speak to victims over the phone in an effort to convince them to invest money in purported collectibles. All of the telemarketers used false names; for example, Narvaez typically used the name "Donnie Cruz."

The telemarketers told victims that their investments were "very safe," that West Coast Gallery clients were averaging a 28.5 percent to 150 percent return on their investments, and that the company would give a refund if a collectible did not sell for a profit within 30 days. The closers attempted to get the investors to make a $2,500 purchase - this later rose to $4,000 - usually for a particular collectible, such as a letter written by former President Reagan.

All of the representations made by the telemarketers were false, and most of the money raised went to Gilson and the telemarketers.

The few collectibles that West Coast Gallery did possess generally came from the eBay Internet auction site for a small price. For example, West Coast Gallery bought a letter written by George Washington on eBay for about $13, and later sold it to a victim for $14,000.

Throughout the scheme, West Coast Gallery raised $3.5 million from approximately 200 victims.

The fraud counts each carry a maximum penalty of five years in federal prison. However, each defendant admitted that their scheme targeted elderly victims, an enhancement that adds another potential 10 years to each fraud count.

All three defendants pleaded guilty before United States District Judge Gary A. Feess. Narvaez and Gallagher are scheduled to be sentenced on February 27, while Gilson is scheduled to be sentenced on March 20.

This case is the result of an investigation by the United States Postal Inspection Service.

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Release No. 05-163

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