Similar bogus ads examined by FBI

By Peter Lewis
Times consumer-affairs reporter

E-mail this article Print this article Search archive

The Seattle office of the FBI is examining similarities among a number of fraudulent, full-page newspaper ads in at least five newspapers, including The Seattle Times, that cheated the papers and misled millions of readers.

In each case, the person or people behind the scam waited until the last minute to send ad copy, paid for the ad with a counterfeit cashier's check and hired a call center to handle orders for readers. The ads, which have appeared over the past six months, hawked down comforters and plasma TVs at low prices.

The scammers used counterfeit checks totaling about $130,000 to pay for the ads that ran in the Austin American-Statesman last July, in The Atlanta Journal-Constitution and The Seattle Times/P-I last month, and in last Sunday's editions of sister papers, The (Stamford, Conn.) Advocate and The Greenwich Time.

In the Austin and Stamford ads, 42-inch plasma TVs were offered at $1,850 and $1,650, respectively. The ads listed nonexistent businesses at fake street addresses. In the Seattle and Atlanta ads, two down comforters and four pillows were offered for $49.95.

Investigators think an aim of the scam was to gather credit-card numbers — and then assume the cardholders' identities to repeat the scam or for other fraudulent purposes.

Indeed, the credit cards used to pay AmeriCall — the Tacoma-based call center hired to deal with customers responding to the comforter ad — were stolen in an earlier plasma TV-ad scam, according to AmeriCall's Scott Hager, who has been working with the FBI. At least one other Texas newspaper is believed to have run the plasma TV ad the same day as the Austin paper, according to investigators. Bottom line for AmeriCall: The company is out $5,600.

"With their scam, they're in and out in a matter of a few days," said Hager. "Before people are onto them, they've already moved on."

Hager said about 1,200 readers responded to the comforter ads that appeared Sunday, Nov. 9, in Seattle and Atlanta.

Some consumers who responded to the ads reported seeing charges on their credit-card statements far in excess of the amounts they authorized. Federal authorities say that consumers who see such charges should dispute them and should cancel the accounts to avoid future abuse.

Investigators say that tracing phone numbers and merchant accounts the scammers used to pull off the ruse is of limited value, because everything leads to fake identities. "You hope they make a mistake, really," according to a federal law-enforcement source.

Last Friday, newspapers that subscribe to a confidential newsletter put out by an Indiana-based credit investigator were alerted to the "Plasma World" ad that ran in the Connecticut papers. The alert warned that the ad was paid for with a fraudulent check drawn on a nonexistent bank.

The man who sent the alert, and asked that his name and company not be used for this article, said the plasma TV ad was submitted to a "handful" of newspapers in the Northeast and mid-Atlantic states. He said he has spoken with Seattle FBI Agent Joe Quinn, as did officials representing the victimized newspapers. Quinn declined comment.

Bob Sorensen, major-accounts manager for the Connecticut papers, alluded to the tough economic climate to help explain how the ad might have gotten through.

"Everybody's running very lean," he said. "These guys (the ones behind the scam) know it well. Ad salespeople are hungry. They want to schedule and post the revenue."

On Tuesday, Seattle FBI spokesman Ray Lauer said that even though a local agent has done preliminary work, the FBI has not formally opened an investigation. Lauer also said another federal agency, which he declined to identify, may take the case.

Yesterday, Rich Lee, an assistant business editor at the Connecticut papers, said he was preparing a story telling readers about the bad ad — something The Seattle Times did last month.

Neither the Austin nor Atlanta papers, both owned by Cox Communications, have run ads or stories explaining the bogus ads to their readers, according to officials at those papers.

Yesterday, Mike Lemke, senior vice president of sales for The Seattle Times, which also represents the Seattle Post-Intelligencer, said the paper obtained from AmeriCall a list of readers who responded to the ad and sent them letters.

"It apologizes to those involved for any inconvenience that the ad might have caused and asks them, if they have not already done so, to please contact their credit-card companies about this situation and to thoroughly check their statements," Lemke said.

Peter Lewis: 206-464-2217 or plewis@seattletimes.com

Copyright © 2003 The Seattle Times Company