2002 FTC -- CANADIAN CASES

Summary

 

• Seven (7) complaints filed and nine (9) final orders obtained involving 77 individual and corporate defendants in the period from December 2001 to the present.
   
• Four (4) complaints filed in last 30 days against 21 individual and corporate defendants.
   
• $769,000 in redress has been awarded to consumers.
   
• FTC has obtained default judgments totaling $18,870,000.
   
• Due to these and earlier efforts, over $6,035,000 in assets and funds remain frozen or encumbered in Canada, the U.S. and elsewhere, and will be available for redress to consumers if FTC and Canadian partners prevail.

Recently Filed Cases

FTC v. D&C National Holdings, Ltd., First British National Holdings Ltd., Omid Tahvili, Derrick Squires and Reginald Pal, filed May 23, 2002. The BC Director of Trade Practices filed action against D&C Holdings Ltd., D&C General Holdings Ltd., First British National Holdings Ltd., New British Holdings Ltd., Dominion Commonwealth Holdings Inc., South Seas International Holdings Ltd., International Lottery Services and International Lotto, as well as individual defendants Tahvili, Squires, Pal, Robert Autar, Jack Butters, Richard Maleschuk, and William Dixon, on May 28, 2002. The defendants pitched both bogus British bonds and foreign lottery tickets. On May 30, 2002, pursuant to a BC Supreme Court order, a raid was conducted on defendants' business premises. In addition, the BC Director of Trade Practices issued an order freezing defendants' bank accounts and personal property including 41 luxury vehicles (e.g., a Ferrari Spider, a Corvette, Porsche 911, Porsche Boxters, several BMWs and Mercedes sedans).

FTC v. Efficient Telesales Services Inc., d.b.a. U.S. Credit Services and U.S. Direct Benefits and Savings, and Leonora Khan, filed on May 28, 2002. The Ontario Provincial Police, the Toronto Police Service and the York Regional Police Service, in conjunction with the Ontario Strategic Partnership, arrested Leonora Khan and executed a search warrant on U.S. Credit's business premises in September 2001. Defendants telemarketed low interest credit cards to U.S. consumers. Defendants claimed to offer pre-approved VISA or MasterCard credit cards with interest rates around 3.9%, no annual fees, and credit limits of $2,500 or $5,000. Consumers did not receive the promised credit cards.

FTC. v. Royal Flush System Network, Inc., ECAPS Credit Solutions Network Inc., Globallot Services, Inc., Flash Productions, Inc., Wilson Okike, Basil Steeves, Natty Osemwengie and relief defendants Obiageli Okike, Lexandine Property Management, Inc., and Uchenna Okike, complaint filed on May 15, 2002; consent agreement with Basil Steeves approved by the Court on May 15, 2002. The defendants' telemarketers persuaded consumers that they would win the German, Spanish or other foreign lotteries if they paid the defendants to play on their behalf. Consumers were also told they had won large sums of money but needed to pay a fee to collect their winnings. Defendants also ran a recovery room scheme advising consumers that for a fee, the defendants would recover money the consumers had lost in other scams. Wilson Okike and Basil Steeves were arrested in the United States, pleaded guilty to criminal wire fraud charges, and are serving time in U.S. prisons. The British Columbia Director of Trade Practices has frozen or filed claims against approximately $926,000 in assets in Canada, while the U.S. DOJ holds another $218,000 in forfeited assets in the U.S.

FTC v. 564196 B.C. Ltd., d.b.a., International Brokers Ltd., Darren James Danbrook, Clifford Eric Edwards, and Iyhab IS El-Jabsheh, filed June 10, 2002. The defendants defrauded elderly U.S. consumers with claims regarding the Australian lottery. British Columbia officials have frozen $211,000 in assets.

Previously Announced 2002 Cases

Case Name	Description	Canadian/Other Action	Number of Defendants	Dollars (US) in Redress, Frozen, or Defaulted	Status
Consumer Alliance	Credit card loss protection scheme	Ontario Strategic Partnership; Ontario Provincial Police filed criminal charges against some defendants	7		Complaint filed. Press release issued April 9.
Dillon Sherif	Canadian telemarketer of Spanish and Australian lotteries	Project Emptor; related action in BC; US DOJ charged Sherif with mail and wire fraud and seeks his extradition to the US	3 2 relief	$1.78 million (approx) in assets frozen in BC	Complaint filed. Press release issued February 25.
Growth Plus	Canadian telemarketer of foreign lotteries	Ontario Strategic Partnership	6	$4.2 million default	Default (permanent injunction) obtained April 16.
OPCO	Canadian telemarketer of credit card loss protection	Project Emptor; related action in BC	11	$5.5 million default	Default judgment (permanent injunction) entered 12/28/01.
R&R	Canadian telemarketer of bogus identity theft protection services and advance-fee credit cards		3	$111,000 redress	Complaint and consent filed. Press release issued April 29.
NAGG Holdings Ltd./Canada Prepaid Legal Services	Canadian telemarketers of bogus British bond lottery instruments	Project Emptor; Mareva injunction issued by Supreme Court of B.C. in DOJ OFL lawsuit, 3/17/01; DOJ then filed in Nevis to recognize the B.C. injunction and in 02/00/02, Nevis court entered a default judgment against one defendant for $3,723,831and against another defendant for $641,851 US DOJ has charged defendant Timothy Babuin with mail and wire fraud and is seeking extradition to the U.S.	14	$2.9 million (approx) in assets frozen in BC $4.37 million default in Nevis	Default judgment (permanent injunction) entered as to 9 defendants. Settlements with 2 defendants filed on or before June 10.
TSI	Canadian credit card loss protection scheme	Ontario Strategic Partnership	4	$4.8 million default	Default judgment (permanent injunction) entered March 14.
1268957 Ontario, Inc.	Internet domain name scam		3	$375,000 redress and fees	Consent filed. Press release issued April 25.
Navestar D.M.	Advance fee loan scheme	New York AG filed related action	3	$250,000 redress ($100,000 fees)	Consent filed. Press release issued January 9.