Two separate cases of telemarketing fraud involving credit cards came to an end Friday as four men were convicted of conspiracy in Iowa, while another pleaded guilty to felony telemarketing in Kentucky.
In Iowa, jurors in federal court convicted the four managers of a telemarketing firm, Gecko Communications, of conspiring to commit telemarketing wire fraud by scamming more than $10 million from almost 50,000 individuals with problems on their credit records.
According to the case brought by the U.S. district attorney, the four operated a business that promised call recipients a pre-approved credit card if they paid a $220 fee. In fact, all victims got in exchange for their money was a credit card application.
U.S. attorneys used as part of their evidence telemarketing scripts, some of which said customers would be “eligible” for a card while other explicitly said they would get the card if they paid the fee. Gecko founder Christopher Ekeland cooperated with prosecutors in bringing the suit; he pleaded guilty to telemarketing fraud in 2004.
The jurors found that one of the four, Zachery Whitehill, another Gecko founder, was also subject to forfeiture of more than $10 million. All four men could face prison time. Whitehill could receive a sentence of 12 to 24 years.
And in a separate case in Kentucky, Matthew Hunt pleaded guilty to four felony telemarketing counts arising from an international scam in which victims’ bank account numbers were obtained with fraudulent promises of pre-approved credit-cards or promises of grants from the U.S. government, for a fee of $199 to $299. Telemarketing firms in Canada and India were involved in obtaining the bank account numbers.
In some cases, victims’ bank accounts were debited without their authorization or under false pretences. Authorities charged that from November 2003 to August 2005, about $3 million from those scam victims was processed through a bank account Hunt set up in Kentucky and then sent on to the telemarketers.
Hunt was arrested and indicted in the case last December. Each charge carries a possible jail sentence of up to five years, with a maximum sentence of 20 years.
