FTC, Partners Put Stop to Canadian Cross-Border Frauds

The Federal Trade Commission today announced federal court action taken against two groups of Canadian-based defendants, each allegedly engaged in widespread cross-border fraud schemes. In the first complaint, FTC v. Centurion Financial Benefits, the Commission alleges the defendants placed unsolicited outbound telemarketing calls to U.S. consumers, falsely offering them pre-approved MasterCard and Visa credit cards for an advance fee of $249. The second complaint, FTC v. Pacific Liberty Benefits, alleges the defendants engaged in the same type of fraud, with the company’s telemarketers promising credit cards, as well as an array of “complimentary” gifts, for $319. The FTC alleges that in neither case did consumers actually receive the credit cards or other goods that they were promised, and in each U.S. consumers lost millions of dollars.

“The Commission continues to work diligently to monitor, track, and prosecute cross-border fraud cases,” said Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection. “We value the assistance of our local, state, and international law enforcement partners in bringing these important cases to help protect and inform consumers both in the United States and abroad.”

In each case, the Commission contends the defendants’ conduct violated Section 5 of the FTC Act and the Telemarketing Sales Rule (TSR), as amended. Judges in the U.S. district court in Chicago, Illinois have issued temporary restraining orders barring the alleged illegal conduct and freezing the assets of defendants. In each case, Canadian law enforcement agencies also executed criminal search warrants and made arrests.

Centurion Financial Benefits

According to the first complaint, since at least 2004, the Centurion Financial Benefits defendants have used outbound telemarketing to contact consumers in the United States, falsely offering major credit cards, such as MasterCard and Visa, to people who agreed to have the defendants electronically debit their bank accounts for an advance fee of $249. The defendants typically claimed that the credit cards would have a $2,000 credit limit, zero percent interest, and no annual fees, and often targeted their offers at consumers with poor credit histories. Consumers who provided their bank account information to the defendants did not receive a major credit card, but instead were sent an application for either a “stored value card” or “cash card” that had no line of credit associated with it and could only be used if the consumer first loaded funds onto the card. The complaint also alleges that the defendants violated the law by calling consumers on the FTC’s National Do Not Call Registry.

The Centurion matter, filed on September 21, 2005, involved a number of corporate and individual defendants. The complaint names the following individuals as defendants, both individually and as corporate officers: Sean Somma aka Sean Soma, individually and as an officer of corporate defendants Centurion Financial Benefits LLC and 1629936 Ontario Ltd, also dba Spectra Financial Benefits; Antonio Marchese aka Tony Marchese, individually and as an officer of corporate defendant 1644738 Ontario Ltd., also dba Sureway Beneficial, Simple Choice Benefits, and Oxford Financial Benefits; Tony Andreopoulos, individually and as an officer of corporate defendants American Getaway Vacations Inc., Credence Travel Processing Inc., and Topstar Media Inc., also dba Integra Financial Benefits; and Dennis Andreopoulos, individually and as an officer of corporate defendants American Getaway Vacations Inc., Credence Travel Processing Inc., and Topstar Media Inc., also dba Integra Financial Benefits.

The complaint also charges the following corporations as defendants: Centurion Financial Benefits LLC; 1629936 Ontario Ltd., also dba Centurion Financial Benefits; 1644738 Ontario Ltd, dba Integra Financial Benefits; American Getaway Vacations Inc., also dba Integra Financial Benefits; Credence Travel Processing Inc., dba Integra Financial Benefits; and Topstar Media Inc., also dba Integra Financial Benefits.

The Commission vote to issue the complaint against the Centurion defendants was 4-0. The complaint was filed under seal in the U.S. District Court for the Northern District of Illinois, Eastern Division, on September 21, 2005, and the Court issued a temporary restraining order (TRO) against the defendants that day. The seal was lifted on September 26, 2005.

Pacific Liberty

The complaint in this matter alleges that the Pacific Liberty defendants also used outbound telemarketing to call consumers in the United States. For an advance fee of $319, which they electronically debited from the consumers’ bank accounts, the defendants promised they could deliver Visa or MasterCard credit cards, along with free gifts such as cell phones. No consumers who paid the money received either credit cards or “complimentary” gifts, instead getting only a “member benefits” package with items such as booklets on how to improve their creditworthiness. Some also received a “member merchandise” card valid for purchases only from a catalog supplied by the defendants. Most recently, the defendants called consumers offering them a brand-name personal computer if they agreed to have a fee debited from their bank account. No one received the promised computers. Instead they received certificates supposedly redeemable for off-brand computers but that required payment of additional fees.

The Pacific Liberty complaint, filed on September 19, 2005, also involved a large number of individual and corporate defendants. The complaint names the following individuals as defendants, both individually and as corporate officers: Oleg Oks, aka Oleg A. Oks and Oleg Alex Oks; Aleksandr Oks; Philip Nemirovsky; and Boris Pekar.

The complaint also charges the following corporations as defendants: 1530605 Ontario, Inc., also dba Pacific Liberty; 159927 Ontario, Inc., also dba Pacific Liberty Group and Pacific Liberty W Group; 1565205 Ontario, Inc., also dba Pacific Liberty and Pacific Liberty W; 1585392 Ontario, Inc., also dba Liberty Wide Info Services, Liberty Wide Info Services Group, Liberty Wide Services; and Liberty Wide; 1620142 Ontario, Inc., also dba Liberty Sun Info Services and Liberty Sun Info; 1619264 Ontario, Inc., also dba C & B Communications Group; 1629930 Ontario, Inc., also dba Atlantic One Info Services Grp and Atlantic One Info Services Group; and 1485635 Ontario, Inc. (dissolved), also dba Nationwide Credit Service Inc., Nation Wide Information Services Group Inc., and Nationwide Information Services, all of which are corporations based in Ontario, Canada.

The Commission vote to issue the complaint against the Pacific Liberty defendants was
4-0. The complaint was filed under seal in the U.S. District Court for the Northern District of Illinois, Eastern Division, on September 19, 2005, and the Court issued a TRO against the defendants that day. The seal was lifted on September 26, 2005.

Law Enforcement Assistance

The FTC appreciates the considerable assistance of several U.S. and Canadian law enforcement partners, including the Toronto and Alberta Strategic Partnerships, in conducting these investigations. In both Pacific Liberty and Centurion, assistance was provided by the Toronto Strategic Partnership. In addition to the FTC, the Toronto Partnership is comprised of the U.S. Postal Inspection Service, Canada’s Competition Bureau, the Toronto Police Service Fraud Squad’s Telemarketing Section, the Ontario Provincial Police Anti-Rackets Section, the Ontario Ministry of Consumer and Business Services, the York Regional Police Service, the Royal Canadian Mounted Police, and the United Kingdom’s Office of Fair Trading.

In the Centurion matter, assistance was also provided by the Alberta Partnership Against Cross-Border Fraud. The Alberta Strategic Partnership consists of Alberta Government Services, the Calgary Police Service, Canada’s Competition Bureau, the Edmonton Police Service, the Royal Canadian Mounted Police, and the U.S. Postal Inspection Service. The FTC alleges that part of the Centurion telemarketing took place from Calgary, Alberta.
(Centurion-Pacific - 9/27/05)

The Commission also appreciates the assistance of the State of Iowa Office of the Attorney General in conducting the Pacific Liberty investigation.

NOTE: The Commission issues or files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the named parties have violated the law. The case will be decided by the court.

Copies of the Commission’s complaints are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File Nos. 052-3072 and 052-3004)
(Civil Action Nos. 05 C 5442 and 05 C 5389)