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On 10/10/2003 at 6:20 PM Jody Neal-Post  wrote:

Organization: Forfeiture Endangers American Rights  http://www.fear.org/
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Antiterrorism Law Used to
Seize Cash From Fraud Ring

By: Gary Fields

WASHINGTON -- Federal agents,
exercising civil-enforcement powers
under the USA Patriot Act for the
first time in a case unrelated to
fighting terrorism, seized funds of
a Canadian telemarketing ring that
allegedly preyed on the elderly.

The Justice Department worked
with Canadian authorities to shut
down the scheme, which involved
Canadian suspects based in
Montreal targeting elderly
Americans and funneling money to
Jordanian and Israeli banks in
Israel.

Mike Gunnison, head of the
criminal unit for the U.S. attorney's
office in New Hampshire, which
brought the case, said recovering
through asset forfeiture the $4.5
million they found in foreign banks
"would have been difficult, if not
impossible," without using the 2001
Patriot Act. The government intends
to use the money that is forfeited to
pay restitution to the alleged victims
of the fraudulent scheme.

The case could have implications
for future prosecutions, because the
Patriot Act will allow authorities to
go after other funds that have been
sent to offshore accounts, as long as
those financial entities have U.S.
branches. The act was designed to
enhance law-enforcement officials'
ability to root out terrorism,
including tracking of financial
sources, and to allow officials to
conduct surveillance on suspects.

Lawrence Goldman, president of the
National Association of Criminal
Defense Lawyers, said he wasn't
surprised the government would
eventually use the law for
nonterrorism cases. "Anytime you
pass legislation that's not narrowly
limited," there are opportunities to
expand its use into other areas, said
Mr. Goldman, a critic of the law.

Canadian and U.S. law-enforcement
authorities arrested 14 people on
charges ranging from racketeering
to conspiracy to commit mail and
wire fraud. Participants in the
scheme allegedly targeted victims
who were unmarried or widowed
and had no dependents living with
them, and who had access to
significant cash. A series of
"qualifying" questions regarding
income and marital status were used
by the participants.

After the victims were qualified,
another participant would call the
victims, claiming to be an attorney
or government official, and would
inform them they had won a cash
prize, usually $200,000. The
victims were told they needed to
prepay Canadian taxes and fees to
collect their prizes. The "winners"
were also told to keep their
winnings confidential or forfeit the
prizes. Once the victims were
drawn into the scheme, the suspects
kept calling, raising the amount of
the fictitious prize while requesting
more money.

Telemarketing fraud from Canada
is a big problem. Sylvain
L'Heureux, constable with the
Royal Canadian Mounted Police
and spokesman for the
telemarketing-fraud task force, said
90% of the victims in this scam
were more than 75 years old. Since
1998, members of the Canadian-
U.S. task force have discovered
losses of $124 million. "That's only
the tip of the iceberg. Only one out
of five victims report it," Mr.
L'Heureux said. The suspects
arrested yesterday, along with a
15th co-defendant, are all expected
to be extradited to the U.S. for trial


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