Canadian Scammers Settle FTC Charges

The Federal Trade Commission, with assistance from Canadian law enforcement officials, has settled two cases against Canadian telemarketing scam operations that targeted U.S. citizens. Both settlements were entered by the U.S. District Court in Seattle.

In the first, telemarketers operating under the names NAGG Holdings Ltd., Canada Prepaid Legal Services and BSI Premium Bonds, among others, allegedly promised that consumers paying a one-time fee of $5,000 would receive monthly payments between $5,000 and $12,000. The companies were based in Vancouver, British Columbia, according to the FTC.

At times, the callers also promised that the purchase of certain bond products would enter consumers into drawings for cash prizes, the FTC claimed. Consumers who paid did not receive any money, and the defendants placed unauthorized charges on some of the victims' credit cards, the FTC added.

Timothy Ryan Babuin, a principal of NAGG Holdings, entered a plea with the U.S. Attorney's Office in Los Angeles, which had filed criminal charges against him, and was sentenced to six years in prison. Some $1.9 million in assets seized by Canadian law enforcement agents will be returned to consumers.

In a separate case, the FTC settled with Dillon Sherif and Melissa Robinson of British Columbia. The FTC charged that the two, operating under a variety of names, sold elderly consumers tickets to foreign lotteries, or claimed that they had won money in an Australian or Spanish lottery or “giveaway” by the Spanish royal family.

Sherif and Robinson collected money for chances to participate in the lotteries, according to the FTC. At least one who had paid $999 to contribute was told that she had won $2 million, and should send $19,300 for “currency conversion fees,” the commission continued.

Consumers received nothing in return for their payments, the FTC alleged.

Robinson was barred from promoting lotteries, and has forfeited assets valued at $59,000 to the consumer services division of the British Columbia Ministry of Public Safety and Solicitor General. Additionally, the U.S. District Court in Seattle entered a default judgment in the amount of $1.8 million against Sherif.

The defendants in both cases were charged with violating the Federal Trade Commission Act and the Telemarketing Sales Rule. Both cases were investigated with assistance from Project Emptor, the Royal Canadian Mounted Police's Vancouver-based telemarketing fraud task force.