CONCORD, NH -- Joseph Taillon, of Montreal, Canada plead guilty to one count of racketeering, one count of racketeering conspiracy, one count of wire fraud conspiracy and one count of mail fraud conspiracy relating to a telemarketing scheme originating in Canada that targeted United States citizens. The guilty plea was announced by United States Attorney John P. Kacavas yesterday.

During the change of plea hearing, Taillon was described as one of the leaders of a telemarketing scheme centered in Canada that focused on elderly victims in the United States. Participants in the scheme called potential victims using cell phones in order to make tracing the calls more difficult. They also asked the victims several “qualifying” questions, to determine their income, marital status, and whether they were living alone. The participants in the scheme, targeted victims who were unmarried or widowed, had no dependents living with them, with no access to significant cash.

After “qualifying” the victims, other members of the conspiracy who claimed to be an attorney or other government official, would place another call to the victims to inform them that they had won a cash prize, usually $200,000. The victims were told they needed to prepay Canadian taxes and fees before collecting their cash prizes and to keep the news of their winnings absolutely confidential or they would forfeit their winnings. By using this tactic, the defendants succeeded in keeping the elderly victims from discussing their status as “winners” with their relatives or financial assistants. This tactic was also successful in persuading the victims not to report the scheme to law enforcement authorities.

The participants instructed the victims to send cashier’s checks to various addresses in the Montreal area. Individuals living at the addresses used by the defendants were paid a nominal fee for receiving the envelopes.

The participants then engaged in a process known as “reloading.” Once a victim had sent a cashier’s check, usually in the amount of $10,000.00, the participants again contacted the victims and told them that their winnings had increased, usually to $2 million. It was explained to the victims that their winnings had increased because other winners had been disqualified for violating the confidentiality rules and that they needed to pay additional taxes and fees because of the increase in their winnings. The victims were directed to obtain and mail another cashier’s check, in amounts ranging from $20,000 to $240,000.

The participants brought the victims’ cashier’s checks to a Montreal restaurant where they exchanged the checks, which were in United States dollars, for Canadian cash. The checks were then sent to Israel and deposited into Israeli and Jordanian-based banks.

In a parallel civil case that was filed by the United States Attorney’s Office and the US District Court, the United States seized $4.5 million from accounts of several Middle-Eastern banks as proceeds of the telemarketing fraud. In doing so, the United States used the newly-enacted forfeiture provisions of the USA PATRIOT Act, 18 U.S.C. § 981(k), which provided new tools to reach forfeitable funds deposited overseas in foreign banks. Until the enactment of section 981(k), a major loophole existed in U.S. forfeiture law, which criminals often exploited to protect their ill-gotten gains by depositing them overseas.

A sentencing hearing is scheduled in the United States District Court for September 1, 2010. Taillon is facing a statutory maximum sentence of 20 years on the racketeering charges and 15 years on the wire and mail fraud charges. Taillon’s sentence under the advisory federal sentencing guidelines is likely to be lower that the statutory maximums.

 

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