A former HSBC Bank USA vice president pleaded guilty on Friday to a charge of conspiracy in a $30 million telemarketing scam aimed at low-income customers with bad credit histories.
Raymond Payne admitted taking part in the wire and mail fraud scheme of a Montreal-based telemarketing “boiler room” operation that defrauded 100,000 U.S. residents, according to the office of U.S. Attorney Michael Garcia.
According to the indictment, Payne acted as relationship manager on an account at HSBC Bank in Manhattan for telemarketer First Choice Tele-Services Corp. He was arrested in 2005.
That account was used to receive income from the telemarketing scheme, which cold-called poor credit risks and offered to guarantee their credit-card approval for fees ranging from $249 to $299. Although some who paid did receive manuals on credit repair, none received the promised credit cards.
In a Friday hearing, Garcia told the court that Payne admitted becoming aware of the fraud in April 2003, during a recorded phone call in which First Choice co-owner Leslie Pinsky told him that the telemarketers were “lying through their teeth.”
The conspiracy charge carries a maximum 20-year prison sentence and a maximum fine of $250,000.
