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Police Break Montreal Telemarketing Ring

December 20, 2006

MONTREAL (AP) _ Authorities arrested more than 30 suspects and broke up a phony telemarketing scheme used to allegedly bilk millions of dollars from American and Canadian senior citizens, police said Tuesday.

The suspects, detained in the Montreal area, took in as much as $11 million a year since 2003, they said.

One of the more lucrative phony pitches involved the suspects posing as officials and demanding tax payments on lottery winnings.

``We had some people listening in on conversations who had to take breaks because they were really disgusted by what they were hearing on the phone,″ said Cpl. Sylvain L’Heureux, spokesman for the Royal Canadian Mounted Police.

``It was the way those people were presenting themselves as people in authority, going after vulnerable people and taking their lifelong savings,″ he said.

Police said the ring had stepped up its operations in recent months and as many as 500 people fell victim every week. Losses ranged from $1,300 to $56,000 per person.

Some victims were in Canada but most were in the United States, according to L’Heureux, adding that several U.S. federal agencies were involved in the RCMP-led probe including the FBI and Homeland Security Department.

He said Americans were targeted because in the United States, winners of lotteries must pay taxes on their winnings. In Canada, lottery winners only have to pay taxes on the interest earned off their lottery winnings.

L’Heureux said most of the victims were from California, Texas and Pennsylvania, the states with the biggest populations and highest number of seniors.

``The particular thing about this is victims are mainly in the U.S. and the criminals are homegrown in Montreal,″ L’Heureux said.

Police said the fraud scheme operated out of boiler rooms in the Montreal area with a variety of pitches.

Seniors were persuaded to play fake lotteries and then were told they had to pay tax to collect their winnings, police said. Some victims mortgaged houses to pay fees demanded by the marketers, according to investigators.

``They targeted vulnerable people who were more advanced in age but had a certain amount of income of retirement funds,″ said L’Heureux. ``It’s sad, very sad.″

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