WASHINGTON—A U.S. district court has permanently barred the ringleader of a multi-million dollar fraud that targeted seniors from all telemarketing activities, agreeing with the Federal Trade Commission’s allegations that he illegally withdrew money from U.S. consumers’ accounts and funneled it across the border to Canada.
The summary judgment entered against Ari Tietolman and the related default judgment entered against associated U.S. and Canadian corporate entities also impose a judgment of $10.7 million, the FTC explained.
“Callers working for Ari Tietolman lied to older people and took their money without permission,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection, in a release. “Their actions were abhorrent. We’re gratified that the court banned Mr. Tietolman from any future telemarketing and awarded over $10 million.”
According to the evidence upon which the court based its findings, Tietolman and his associates established a network of U.S. and Canadian entities to carry out their scam, the FTC explained The defendants used a telemarketing boiler room in Canada, where Tietolman lives, to cold-call seniors claiming to sell fraud protection, legal protection, and pharmaceutical benefit services for $187 to $397.
The court found that Tietolman’s telemarketers deceived consumers to obtain their bank account information. Sometimes the telemarketers even convinced consumers they were affiliated with banks or government entities. The defendants then used consumers’ bank information to create checks drawn on the consumers’ bank accounts. They deposited these “remotely created checks” into corporate accounts set up by defendants in the United States, thus debiting consumers’ accounts without permission, the FTC stated. The U.S.-based defendants then transferred the money to accounts in Canada.
“The court found that these actions violated the FTC Act and the agency’s Telemarketing Sales Rule. The court found that Tietolman’s scheme caused $10,734,255.81 in consumer harm and awarded the FTC a judgment for that amount, the FTC reported.
In addition to the monetary judgment, the court’s orders bar Tietolman and the corporate defendants from all telemarketing activities, ban them from using remotely created checks and payment orders, prohibit them from charging consumers without their express informed consent, and bar them from making misrepresentation during the sale of any goods or services.
The corporate defendants in the case include First Consumers LLC; PowerPlay Industries LLC; Standard American Marketing, Inc.; 1166519075 Quebec Inc., doing business as Landshark Holdings Inc.; and 1164047236 Quebec, Inc., doing business Madicom, Inc.
Last month, two defendants in the scheme who were operating in the U.S., Marc Ferry and Robert Barczai, agreed to stipulated orders settling the charges against them.