News and Press Releases

"Auto Warranty" Telemarketer Pleads Guilty

FOR IMMEDIATE RELEASE
June 15, 2012

Robert Dolan, 62, of Miami, FL, pled guilty today in federal district court to fraud charges
arising out of the telemarketing sales practices of Transcontinental Warranty, a Florida company
selling so called “auto warranties” through robo dialing and voice blasting, Stephen R. Wigginton,
United States Attorney for the Southern District of Illinois, announced. Dolan was the third person
to be prosecuted in the scheme. Christopher D. Cowart, the President and CEO of the company, and
Cris D. Sagnelli, the Vice President of the company, were each sentenced to five years incarceration
on October 31, 2011. The charges follow a lengthy investigation by the U.S. Postal Inspection
Service and the Federal Trade Commission in Chicago.

The Criminal Information (the formal charge to which Dolan plead) alleges that Transcontinental Telemarketers falsely implied that they were calling from, or were affiliated with, automobile manufacturers, represented that the consumer’s factory warranty had expired or was about to expire, and offered consumers the opportunity to extend or reinstate their factory warranty. In truth, Transcontinental had no affiliation with any automobile manufacturer and had no ability to extend or reinstate the manufacturer’s warranty. Instead, Transcontinental was selling vehicle service contracts from third party companies. These contracts provided some coverage for automobile repairs similar to, but not identical with, that of a factory warranty.

The Criminal Information alleges that Transcontinental used another company to act on Transcontinental’s behalf to robo-dial customers throughout the United States. The company used
equipment that could automatically dial every telephone number in an area code, play a pre-recorded
message telling the customer that their auto warranty was supposedly expired or about to be expired
and then transfer the call to Transcontinental telemarketers. The Criminal Information alleges that consumers “were inundated by a tsunami of unsolicited and unwanted calls,” that “the calls were relentless and the recipients of these calls for the most part found it impossible to make them stop.” Once the customer answered a call, it was transferred to a Transcontinental telemarketer who told the customer that he or she was calling from the “Warranty Service Center,” which the Information alleged was a “fictitious name” implying that the call was from the warranty service center of the automobile customer.

Dolan pled guilty to a statute which prohibits the use of a fictitious name in connection with a mail fraud scheme. It carries a potential penalty of up to five years in prison, a fine of $250,000, and a term of supervised release not to exceed 3 years. Since the offense involved telemarketing, Dolan is subject to an additional term of incarceration of five years under the SCAMS Act (Title 18, United States Code, Section 2326(1)).
Sentencing is set for October 1, 2012 .

This is the latest in a series of major national and international mass marketing fraud prosecutions undertaken by the U.S. Attorney for the Southern District of Illinois in partnership with the U.S. Postal Inspection - Chicago Division and the Federal Trade Commission - Midwest Region.

The case is being prosecuted by Assistant United States Attorney Bruce Reppert.

Consumers who believe that they have been the victim of a consumer fraud should contact the Federal Trade Commission. To file a consumer complaint, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC's Web site provides free information on a variety of consumer topics.

 

 

 

 

 

 

 

 

 

 

 

 

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