"We allege the mailings are used to identify elderly consumers who are vulnerable to big-ticket telephone scams mostly operating out of Canada," Miller said.
DES MOINES. Attorney General Tom Miller announced today that his office has seized about 7000 pieces of mail at a commercial mail-drop in Clive -- thwarting a nationwide scheme Miller believes is designed to identify elderly consumers who are vulnerable to large-scale telemarketing fraud.
"The mail is from consumers all over the U.S. and Canada," Miller said. "The letters are people's responses to mass-mailing prize solicitations we allege are illegal. Even more important, anyone who responds to these highly-questionable mail solicitations all but announces his or her vulnerability to bigger prize fraud and other schemes. This mail would make a very hot list for telemarketing fraud."
A Polk County District Court judge issued an "order to impound" mail coming to a commercial mail drop called "Pkg's" at 10201 University Ave, #335, Clive, Iowa 50325. Pkg's is not subject to the consumer fraud investigation and has cooperated fully with the Attorney General's Office. The Attorney General's Office has obtained about 7000 pieces of mail already, and continues to receive hundreds of pieces each day.
The impound order covers mail coming to the "mail drop box" in Clive arranged in mid-November by Richard James Panas of Rock Hill, South Carolina. The Iowa Attorney General's Office learned recently that Panas was under active investigation by federal authorities and that Nevada authorities have issued an arrest warrant for him.
"The letters come from consumers in response to several prize-oriented mail solicitations sent by Panas under various business names," Miller said. He said the solicitations mislead many people to think they have won or may likely win huge prizes of thousands or millions of dollars -- and ask for a small payment of $10 or $20 for things like "administration" or "pre-processing" fees.
"We allege these mailings are themselves illegal," Miller said. "They violate our consumer fraud laws and especially our Prize Promotions law that has many specific requirements aimed at protecting people from deceptive solicitations. But these mailings pose a much bigger threat than cheating people out of $10 or $20," he said.
"We believe the mailings are used to identify especially elderly consumers who are vulnerable to big-ticket telephone scams mostly operating out of Canada," Miller said.
"We have thousands of people, mostly older citizens, we think, who by responding to the highly questionable mail solicitation have indicated they are vulnerable to other scams."
One of Panas' businesses, "RP Associates," operates a web site that sells a variety of "lead lists" related to sweepstakes and prizes. List names include "Award Notification Responders," "Dream Come True Sweepstakes Entrants," and many others.
Miller said most "boiler-room" big-ticket phony prize schemes now operate from outside the U.S., especially from Canada. The "undercover telephone sting" pioneered by the Iowa Attorney General's Office during the 1990s, and then employed by U.S. agencies and other states all over the country, largely has driven large, organized, big-loss telemarketing operations out of the U.S. "Unfortunately, they are flourishing in Canada - and calling our people in the U.S.," he said.
A typical big-ticket telemarketing scam from Canada would involve a call to a vulnerable older Iowan, a pitch that the Iowan had won millions of dollars in a lottery or sweepstakes or prize promotion -- and a requirement that the Iowan pay $1,000, $3,000, $5,000 or even more to collect the prize. (The scammers use many ruses to justify the payment the victim must make to get the millions in prize money -- paying taxes in advance, customs fees, etc.)
"As always, these telemarketing scams rely on targeting vulnerable older persons who can be fooled or who may not have quite the same judgment they had in earlier years," Miller said. "They are cynical and vicious schemes and we continue to fight them. Even though we have driven most of the perpetrators out of the U.S., we continue to discover Iowans who are victimized and lose thousands of dollars."
The Court impound order, issued Wednesday afternoon, provides that the Attorney General's Office may retain possession of the mail "until the completion of all proceedings" in connection with the consumer protection investigation or further order of the Court.
"I think we have seriously disrupted this operation," Miller said.
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