Criminal charges against six individuals allegedly involved in a telemarketing scheme targeting elderly people were brought today by the US Attorney’s Office for the Southern District of New York. According to the Complaint, the defendants contacted elderly consumers with business opportunities requiring nothing more than a simple cash investment. The consumers were promised that they would see large returns on that investment without them needing to do anything other than the initial investment. After making the investment, the consumers would then receive additional telemarketing calls offering other services such as coaching, business development, and tax preparation services. The Complaint alleges that none of the consumers received what they were promised.

The line between deceptive and fraudulent telemarketing often is not a bright one. The facts alleged in the case are strikingly similar to several cases—civil cases—brought by the FTC in recent years under Telemarketing and Consumer Fraud and Abuse Prevention Act (Telemarketing Act) and FTC Act. While the FTC imposed severe restrictions on the parties, including lifetime bans on certain types of telemarketing, and extracted steep monetary judgments, criminal charges for wire fraud and money laundering, like those brought today, each carry minimum sentences of 20 years in prison.

Companies that sell or buy telemarketing leads need to be particularly vigilant of who they do business with. As the Complaint unveiled today notes in some detail, consumer leads are often sold or passed from buyer to buyer. Without knowing exactly how and by whom the lead was originated, your organization’s telemarketing is at risk regardless of how compliant the actual telemarketing practices.