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The Federal Trade Commission has charged the operator of a Vancouver, Canada-based telemarketing operation with targeting elderly U.S. consumers in connection with offering nonexistent foreign bonds and supposed cash prizes.

According to the FTC, the defendant, John Raymond Salvator Bezeredi, falsely promised consumers that after buying the bonds, they would be entered into monthly drawings and that they were very likely to receive substantial cash winnings or receive regular cash payments. Few, if any, consumers ever received such payments after buying the “bonds,” leading the Commission to charge Bezeredi with violating the FTC Act and the Telemarketing Sales Rule (TSR). He also has been charged with illegally calling consumers on the National Do Not Call Registry maintained by the FTC and the Federal Communications Commission.

The complaint announced today was filed against Bezeredi, individually and doing business as Dominion Investments, Eurobond Fidelity Ltd., and Imperial Investments – the names under which the bonds were marketed. On October 17, a federal district court in Seattle issued a temporary restraining order barring the defendant’s allegedly illegal conduct, pending the resolution of the Commission’s complaint.

Along with the FTC’s complaint, a simultaneous civil action against the defendant was filed in British Columbia, Canada. In addition, Bezeredi was arrested on October 21, 2005, in Vancouver, B.C., pursuant to criminal charges filed by the U.S. Attorney’s Office for the Central District of California. Bail was set at $1 million (CDN).

Bezeredi’s Alleged Business Practices

The FTC contends that Bezeredi, through his Canadian telemarketing operation, contacted mostly elderly U.S. consumers, offering them the chance to invest in European bonds
involving monthly cash prize drawings. Telemarketers allegedly told consumers they were highly likely to receive regular cash winnings of at least 50 dollars if they bought the bonds over the phone. At times, telemarketers called consumers more than once in an attempt to persuade them to send multiple payments for additional bonds.

Consumers who bought the defendant’s “bonds” received a variety of documents on letterhead bearing a Hungarian address. The documents included a cover letter congratulating them for participating in the bond program and explaining the “value” of their membership program. Consumers also received an information sheet stating that their bond purchase is registered with the “European Central Union Bank. Unfortunately, for the consumers who bought the “bonds,” there is no “European Central Union Bank,” and the European Central Bank, which sets monetary policy in the 12 European countries that use the Euro as legal tender, does not operate a prize bond program.

According to the FTC, consumers paid Bezeredi between $400 and $5,950 each to buy the foreign “bonds” his telemarketers were pitching. Most consumers who sent money received nothing of value in return.

The Commission’s Complaint

According to the Commission’s complaint, Bezeredi violated both Section 5 of the FTC Act and the TSR by telemarketing foreign bonds to U.S. consumers. Specifically, Bezeredi allegedly misrepresented that consumers who buy from, or pay fees to, Dominion, Eurobond, or Imperial would receive regular cash payments, would be entered into monthly drawings to win cash or prizes, or likely would receive cash winnings. Further, the FTC charged that Bezeredi failed to disclose to consumers that importing and trafficking in foreign lotteries is a crime in the United States, and that the bond scheme he was pitching constitutes such a lottery. Finally, the complaint charged the defendant with violating the Do Not Call provisions of the TSR by calling, or causing other people to call, numbers on the National Do Not Call Registry, as well as by failing to pay the required fees for access to telephone numbers in the area codes he and his telemarketers called.

The Commission vote authorizing the staff to file the complaint was 4-0. The
complaint was filed under seal in the U.S. District Court for the Western District of Washington at Seattle on October 17, 2005, and the judge issued a temporary restraining order against the defendant the same day. The seal was lifted on October 21, 2005. In filing the complaint, the FTC is seeking injunctive and equitable relief, including restitution and a permanent injunction prohibiting the defendant from violating the FTC Act and the TSR in the future.

The investigation leading to the complaint in this matter was coordinated with the British Columbia Telemarketing Task Force, known as “Project Emptor.” In addition to the FTC, other agencies participating in Project Emptor include the Royal Canadian Mounted Police, the British Columbia Business Practices and Consumer Protection Authority, the Canadian Competition Bureau, the FBI, the U.S. Attorney’s Office for the Central District of California, and the U.S. Postal Inspection Service.

Educational Outreach

As part of its educational outreach, the FTC has a consumer alert on international lottery scams, available at, which has these words of caution for consumers who are thinking about responding to a foreign lottery:

  • If you play a foreign lottery – through the mail or over the telephone – you are violating federal law.
  • There are no secret systems for winning foreign lotteries. Your chances of winning more than the cost of your tickets are slim to none.
  • If you purchase one foreign lottery ticket, expect many more bogus offers for lottery or investment “opportunities.” Your name will be placed on “sucker lists” that fraudulent telemarketers buy and sell.
  • Keep your credit card and bank account numbers to yourself. Scam artists often ask for them during an unsolicited sales pitch.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has or is being violated, and it appears to the Commission that a proceeding is in the public interest. A complaint is not a finding or ruling that the defendants have actually violated the law.

Copies of the Commission’s complaint are available from the FTC’s Web site at 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, 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 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 No. 042-3152; Civ. No. CV5-1739)

Contact Information

Media Contact:
Mitchell J. Katz
Office of Public Affairs
Staff Contact:
Mary T. Benfield or Laureen France
FTC Northwest Region