Tagged: Scambusting

RMZ Fire Safety: The Investigation Continues

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Last week I launched a new mail fraud investigation of an entity calling itself RMZ Fire Safety. I outlined the reasons I suspected that the outfit was bogus — chief of which was they sent an invoice for services they didn't render, and I could find no trace of their existence.

One of my purposes was to create a presence for RMZ Fire Safety on Google so that when other businesses received their invoice they would find my post, and hopefully send tips about further invoices.

It's working.

A tipster received an RMZ invoice at her business, Googled it, found my post, and sent me this invoice.

The second invoice strongly corroborates the fraud. First, it's yet another business that got the invoice despite never having heard of RMZ Fire Safety or receiving services from it. Second, the "Account #" — which for a legitimate business would reflect each customer's individual number — is identical to the "Account #" on the first invoice I received. That's typical of mail fraud schemes.

I've given the invoices to a Postal Inspector I happened to meet on some other matter. Never mind which one that was.

Keep sending in the invoices, and I will keep forwarding them to the Postal Inspectors. In addition, if anyone has any ideas on getting information on the persons associated with the phone number — (626) 373-8717, using Google Voice — let me know.

"The Takedown Lawyer": Let's Help Marc Randazza Investigate A Scammer, Shall We?

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I've been out of sorts of late, riven with the suburban fin de siècle, plagued with ennui, angst, weltschmertz. You know — moping.

There's only so many free speech cases I can write about in a week. Nobody pony-worthy is writing to me. I'm waiting for a couple of shoes to drop on the UST Development fraud investigation.

If only there were a nice juicy scam out there to chase . . .

Marc Randazza to the rescue!

(more…)

Anatomy of a Scam Investigation, Chapter Thirteen

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This series is about my independent investigation of a local mail fraud ring, its methods, the history of its practitioners, and the methods I've used to investigate it. This happened because the fraud ring tried to scam my firm on an already trying day, thus mildly annoying me. Contemplate that, and conduct yourself accordingly hereabouts. You can find the chapter index here.

It's been four months since I wrote about U.S. Telecom aka UST and its principals, including David Bell. Slowly but surely, various states are waking up to their mail fraud scheme. And the feds? No comment.

Yesterday wasn't a good day for the UST team. The Connecticut Department of Consumer Protection announced that UST/U.S. Telecom consented to an order against it prohibiting it from doing any business in Connecticut and requiring it to refund money obtained from victims in Connecticut, including several government entities. (You may remember from earlier chapters that UST started to target government entities, probably to take advantage of lax controls on accounts payable.) The Connecticut media has picked it up. I've obtained a copy of the complaint and consent order here. Note that the attached sample invoice is typical of the past ones we've discussed. UST did not admit wrongdoing, but consented to the order. Connecticut now joins North Dakota and New York in ordering the UST team to cease and desist their scheme.

Even though they were represented by an attorney in the Connecticut proceeding, and even though they've now been ordered to cease and desist in three states, UST has not stopped doing that thing it does. It's just changed the pitch a little bit. Tipsters continue to send me sample solicitations received from UST. Here are two recent examples. As you can see, UST has altered the fake invoice minimally but has kept the general format and the "please remit" and the "net 30 days" language which, as the Connecticut complaint points out, are calculated to deceive. UST now attaches a sheet of badly drafted boilerplate terms and conditions to the solicitations; you can see it in both examples. It doesn't detract from the overall deceptive nature of the solicitation. As I said in the first chapter of this series, solicitations designed to look like bills are prohibited by federal law, which requires multiple specific elements that UST has been ignoring for more than a year now:

(d) Matter otherwise legally acceptable in the mails which—
(1) is in the form of, and reasonably could be interpreted or construed as, a bill, invoice, or statement of account due; but
(2) constitutes, in fact, a solicitation for the order by the addressee of goods or services, or both;
is nonmailable matter, shall not be carried or delivered by mail, and shall be disposed of as the Postal Service directs, unless such matter bears on its face, in conspicuous and legible type in contrast by typography, layout, or color with other printing on its face, in accordance with regulations which the Postal Service shall prescribe—
(A) the following notice: “This is a solicitation for the order of goods or services, or both, and not a bill, invoice, or statement of account due. You are under no obligation to make any payments on account of this offer unless you accept this offer.”; or
(B) in lieu thereof, a notice to the same effect in words which the Postal Service may prescribe.

UST's team knows that's the law, because they've been following this series, and because the Better Business Bureau wrote them and told them. The fact that they've failed to comply for more than a year is overwhelming evidence of fraudulent intent. UST's planned defense is, apparently, "we aren't sending fake bills, we're asking people to buy preventative maintenance warranties." Logical problems with that, and with the solicitation, aside (what kind of solicitation has no information about the company or their services to convince you to buy?), let me say this: I've gotten dozens of tips over the last year about UST, and I've never heard from a single person who received services from them.

Meanwhile, David Bell has a pretrial hearing in his criminal case on September 21, 2012. I'll keep you up to date.

Teaser Post: Upcoming New Scam Investigations

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Since the start of my investigation of UST Development and David Bell, I've said that I want to start up a new public investigation. The heartening response to the UST story has redoubled my commitment to do so.

As before, I have a number of goals, all mutually supportive:

1. I want to make it more difficult for specific scammers to succeed.
2. I want to develop information to make it more likely that specific scammers will be prosecuted, or otherwise pursued, by the government.
3. I want to encourage others to investigate, and write about, scams, in the hopes that the aggregate effect will be to make scamming more difficult, and send mroe scammers to jail.
4. I want to help people figure out how they can use public resources to investigate scammers. As subsets of that point, I want to encourage people to be more self-reliant and encourage the "Army of Davids" phenomenon.

So. The UST investigation will continue until everyone involved is in jail. But I have now tentatively chosen the subjects of two new scam investigations. I'm going to give you the briefest tease about one of them.

The teaser: Recently I've gotten a burst of "please let me write for your blog" or "you might be interested in writing about this" emails that seem to be a new iteration of a guest-blogger scam I wrote about last year. A little quick preliminary digging suggests that it is part of a larger SEO-related scam. You might be surprised to see that one infographic from the scam enjoyed wide circulation in our circles — a couple of our readers retweeted it or otherwise publicized it themselves. It's not clear to me yet whether the same people are involved in all of these solicitations, or whether it represents a methodology that is now becoming more widespread. But I'm going to find out. I have some names (entity and individual) and addresses. My aim is to identify the actual human individuals behind this, seek interviews with them, and widely publicize their identities and activities.

And you, Gentle Readers, will help me, I hope. More soon. For now, until we get the ball rolling, please send tips to me via email rather than comments.

The second scam topic? Well, more on that later — but I've mentioned it before.

The game's afoot.

Anatomy of a Scam Investigation, Chapter Eleven

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[Wondering what's going on here? Check out the Chapter Index on this series.]

The wheels turn slowly, but they turn.

Congratulations to the great state of North Dakota, the first state — so far as I have been able to determine — to take action against David and Branden Bell's UST Development mail fraud enterprise. California (and federal) officialdom ought to be embarrassed that North Dakota — with far fewer resources, and with its citizens targeted far later in the game — took action first. Pull your thumbs out of your asses, people.

Popehat reader Ray alerted me that the North Dakota Office of the Attorney General has issued a cease and desist order (and notice of right to request a hearing on the order) to UST Development, its various entity aliases and alter egos, and to David Bell individually, accusing them of consumer fraud. The Attorney General's press release, and news stories discussing it, are available on the internet and are quickly contributing to UST's and David Bell's overwhelmingly negative web presence. Good job, North Dakota.

Ray, the tipster who pointed me to this, reports that his city government in Kansas has received three invoices from UST. This is not surprising. I continue to get tips from people across the country — both at private businesses and public entities — who have received these invoices — from a private business in Kansas, from a school district in Minnesota, from a private business in Louisiana. I suspect that civil discovery — or a search warrant — will reveal that David Bell has purchased some mailing lists of some sort, possibly "reload lists" of individuals and businesses that have fallen for scams before.

There are several things that are notable about the latest iteration of the UST scam invoice. First, notice that Bell and UST have sent them out in 2012 — as I said last time, this establishes without cavil that Bell and UST continue to send the invoices knowing that recipients find them deceptive, knowing that they violate federal law, and knowing that multiple consumer complaints have been lodged against them. Notice also that UST has transitioned to a new Post Office Box — Box 970 in LaVerne, California. Hopping from address to address and from box to box is typical of mail fraud schemes. Notice that the language has shifted slightly again. The gibberish non-disclaimer disclaimer remains, in an even more deceptive form: "Thank you for your business, this warranty covers preventative maintenance on all telecom systems equipment, including, telephone instruments, switches, routers, and cabling." Query: how does one sell a warranty (something usually invoked when something goes wrong) for preventative maintenance? Also, how does UST — a California entity the various iterations of which have gone bankrupt — plan on providing services in Kansas and Minnesota and Louisiana? They've also added the deceptive "Term: Net 10 Days," which typically denotes that a business expects payment in 10 days for services already rendered, usually implying that this is under a preexisting agreement with a vendee. UST and Bell have simply removed some deliberately misleading language (like the suggestions of service on multiple occasions, or the suggestion that the invoice is past due) with new and different deliberately misleading language. This, too, is typical of mail fraud schemes.

Let's hope some additional states step into the act, and let's hope California and the feds step up, as they should have long ago.

Meanwhile, David Bell's pretrial hearing in his criminal case was continued yet again until April 19,2012, probably because he retained a new attorney. Such delays are typical.

I'll be seeking a comment regarding the North Dakota cease and desist order through Mr. Bell's new attorney. I note that Denis Baranowski, an attorney who used to be the registered agent for service of process for UST Development, Inc., has resigned from that role. That was the prudent and ethical thing do to, and I commend him for it. I respectfully suggest that he may want to review his role as registered agent for service of process for California Consultant Group, Inc. with care, as it appears to be another UST/Bell entity, as we discussed in Chapter Nine.

This investigation will continue. Your tips remain welcome. See you soon.

Edited to add:

Here's part of the letter I sent to the gentleman I believe is his new attorney:

I write because I infer that you are the attorney who appeared this week for David Bell in a criminal matter in San Bernardino County Superior Court. If I have the wrong [attorney name], please ignore this inquiry.

Since Mr. Bell, through his entity UST Development, Inc., sent what I believed to be a fraudulent invoice to my company, I have been writing an investigative series regarding his entities and what I believe to be his mail fraud scheme. I write today to seek his comment — or, if you wish, yours — regarding recent developments in that scheme. You can find an index of what I have written here: http://www.popehat.com/2011/09/25/anatomy-of-a-scam-chapter-index/

Specifically:

1. Does Mr. Bell have any response to the North Dakota Attorney General's Office issuing a Cease and Desist Order to UST Development, and to him personally, based upon apparent consumer fraud? Will the UST entities — and Mr. Bell — make any adjustments to their business practices based upon that order? Will they contest it?

2. The UST entities, and Mr. Bell, have continued to send their "preventative maintenance" invoices in substantially the same form even after the Better Business Bureau, among others, have informed them that the invoices violate, for instance, 39 U.S.C. section 3001. Does Mr. Bell have any comment on whether he believes his invoices comply with 39 U.S.C. section 3001, and if so, the basis for that belief?

3. Two UST entities — UST Development, Inc. and UST Dry Utilities, Inc. — have been in bankruptcy, as have Mr. and Mrs. Bell personally. Yet the UST entities are sending invoices across the United States. I have received invoices from tipsters as far away as Louisiana. Would Mr. Bell care to comment on how he, and his entities, are able to provide "preventative maintenance" services in other states? Would he like to comment on precisely what those services would entail, and exactly who would provide them? Would he like to comment on precisely what services customers are entitled to if they pay "UST" the amount listed on the invoices?

4. Mr. Bell's latest invoices are under the name "UST," as opposed to past invoices that referenced UST Development, Inc. Is UST a legal entity? If so, in what form, and in what jurisdiction?

5. Is Mr. Bell personally affiliated with "California Consultant Group, Inc.", a California entity using the same agent for service of process he has used and the same address he has used? What is the business of that entity? Is it affiliated with Mr. Bell's "preventative maintenance" invoices?

Any comment from Mr. Bell, his affiliates, or you would be welcomed, and I will be happy to print any response from Mr. Bell to anything I have written.

Thank you,

etc.

Anatomy Of A Scam Investigation, Chapter Ten

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What's this all about? The index of prior chapters is here.

Greetings, scambusters. Back in Chapter Nine I pointed out that David Bell and his UST entities were still, months after being revealed, running the mail fraud scheme I first described in Chapter One.

Tipsters from across the western United States continue to send me examples. Here are invoices received in Arizona, Oregon, and Washington. I've redacted them to protect the intended victims from any con-man harassment or retaliation. There are a few important points to note:

1. David Bell and his UST companies are going aggressively multi-state. The is common with mail fraud schemes as they develop — it's harder for victims in other states to get law enforcement support.

2. Either my tipsters are disproportionately government workers, or Bell and his team are targeting government offices for the invoices. That is not uncommon among fraudsters — accounts payable procedure in federal, state, and local government offices can be lax, and bogus invoices can yield successes that private targets do not. Of course, targeting government offices also opens up a new array of criminal statutes . . . .

3. Bell and UST are morphing and rebranding the scheme. Previously their invoices used "UST Development, Inc." as the soliciting entity. Their next generations of invoices use a generic "UST" and use a reference to the "www.us-telecom.com" url rather than "www.ustdevelopment.com" (though both lead to the same site). Bell has almost certainly made this change because the Google profile for "UST Development" overwhelmingly emphasizes fraud, whereas the generic "UST" reveals little. Scammers commonly change the names and branding associated with their schemes in order to make it harder for potential victims to detect the fraud. Though there are a few stray internet references to a "UST, Inc.", research at the California Secretary of State's Business Search Portal shows that there is no current, active UST, Inc. authorized do to business in California.

4. Bell is also changing his mailing address. Note that the latest invoices change from the familiar Ontario street addresses to an Ontario Post Office box address. Once again, this helps Bell and UST stay one step ahead of Google — the street address search results are cluttered with references to fraud, while the new box is relatively "clean." The aim is to thwart the very casual searcher. Google shows me that the box number — at least at some point — was the mailing address of the Ontario branch of a national auto supply company. In a few Friday calls, low-level staff at the company professed ignorance of the box. It's possible that the company abandoned the box and Bell and his team bought it. It's also possible that a member of Bell's team is an insider at the company and is using their box as a "safe" mail drop. I'm following up with some calls higher up the chain, as well as correspondence to the company's national office. We'll see.

5. At this point, I'd characterize the evidence of fraudulent intent as overwhelming. Con artists typically plan to argue "we meant well, we didn't realize there was anything wrong or misleading about this solicitation." That defense has been thoroughly stomped by now. Leaving aside their communications with me and their monitoring of this series, David Bell's UST team has been busily responding to dozens of Better Business Bureau complaints, saying roughly the same thing every time:

I would like to start off by apologizing for any inconvenience or confusion this invoice may have caused. We here at UST sell, service, and maintain business phone systems and inside wiring. The invoice you received was not for services rendered but instead for preventative maintenance for the year to come. The preventative maintenance covers your inside wiring and preventative maintenance for a 12 month period, opposed to being billed for every service call, or at 15 min increment. This is an invoice that is sent out once a year for a full service maintenance agreement. This invoice is optional; it is not a mandatory service. Once again I apologize and I hope this clarifies the misunderstanding. We will not contact this company in the future.

Bell and his team probably see this as keeping their stories straight. In fact, all it shows is that they were aware that many consumers found their advertisement to be confusingly similar to an invoice. Yet they've continued to send that invoice, without major substantive changes, across the West — even after the Better Business Bureau (and I) pointed out that it violates very specific federal law prohibiting ads made to look like invoices, and even after the BBB turned up its fraud rhetoric against UST. In fact, they've continued it after local media has reported on the scam. This utterly quells the "it's not really misleading, we didn't mean to mislead" defense. If Bell and his team had been acting in anything remotely resembling good faith, they would have altered the invoice to comply with federal law — or at least to remove the elements that make it so misleading.

They've made very small gestures towards changes — for instance, by changing "amount due" to "amount," and removing the "past due" boxes — but the document overall is still clearly designed to look like an invoice, and the change really does little more than prove consciousness of guilt.

Moreover, I suspect that law enforcement investigation and/or civil discovery will demonstrate that the "we actually provide preventative maintenance" defense is fraudulent. The bankruptcy cases of UST Development, UST Dry Utilities, David Bell, and Branden Bell contradict the suggestion that they have the equipment and resources to provide preventative telecom maintenance across the West. Moreover, several tipsters indicate that they have called and asked "UST" to send them materials about the services offered, but have not received anything.

Many have expressed frustration that David Bell and his crew are able to conduct mail fraud so openly for so many months without result. I admit I have been frustrated as well. However, at the moment, for reasons I will not discuss, I am not frustrated. More on that in the next chapter, perhaps.

Anatomy of a Scam Investigation: Chapter Nine

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The Snark Knight

"The Snark Knight" by Roger "Quipp" Kirk

Wondering what this is about? The index of prior chapters is here.

So: It's been three months since I wrote about David Bell and his confederates and companies. Have they reformed? Have my sources of information dried up? Have I lost interest?

No, no, and no.

For one thing, career con men do not reform. They die or get locked up.

For another: I'm not going anywhere.

(more…)

Crowdsourcing A Scam Investigation: 253-246-8503

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This morning, it came again: a robo-call from Kent, Washington — at 253-246-8503. The recording was of a chipper woman saying she was from "Credit Card Services" with an "important message" about my credit card.

This is perhaps the fifteenth or twentieth such call I've gotten on my cell phone. I've never pressed one to get more information; I always hang up. Even though it sounds like an obvious scam, even though I'm on the do-not-call list, even though they are illegally calling my cell, I've never bothered to look into it.

But today it's raining in LA, and people drive like lunatics, and I was late and in a bad mood. Today I slept badly and am feeling off. Today things at work are annoying me. Today I also got an email from a Popehat reader who has been annoyed by the same calls from the same number, and who had read my Anatomy of a Scam series about investigating a crook. [A quick aside: watch for an update on that soon!]

Upon such little coincidences our lives turn. Scammers, I may decide to pursue you, or not, depending on how last night's dinner is sitting. Your fate may turn on Scrooge's fragment of an underdone potato.

Time to drop the hammer. And I'm sending up the Popehat Signal, because it's time for you, ungentle readers, to help. We're crowdsourcing this motherfucker.

Like the Batsignal, only with much more relaxed physical fitness requirements.

So: first. You know our methods, Watson. Preliminary Google results for 253-246-8503 reveals many hallmarks of a scam: multiple results on nearly every "who is calling me" site on the internet, consistent stories about robocalling to people on the do-not-call list and to cell phones, consistent stories of pressing "1" leading to rude and abusive and evasive telemarketers (including, but not limited to, threats of violence and attempts to induce children to give up their parents' credit card numbers), and potentially related scam enterprises at the same 253-246 prefix. Many people have apparently already contacted authorities; I recommend that everyone continue, using optimal reporting methods and looking to the FTC, the Attorney General of your state, the Attorney General of Washington state, and possibly the King County Prosecuting Attorney.

A note about publicizing this: for God's sake, if you are complaining about a telemarketer and posting your experience on a site like 800notes.com, don't post something like "these people called my cell phone number, 213-555-1000, and I want that number removed from their calling list, and my name is Gullible Numbnuts." People. Don't post your name and phone number on the internet.

So. I need some help:

1. Anyone in or near Kent, Washington, who could scope out locations once we start to find them?

2. Some of you are awesome Google wizards who put me to shame. Any thoughts on using public resources to track the number to individuals, named companies, or addresses before I start spending money to do so?

And, finally, there's a specific group I need help from: current or former employees of "Credit Card Services" from 253-246-8503. People who work there or have worked there, I'd like to address you for a moment. I bet some of you will get here eventually.

You probably worked there because you didn't have a lot of other options. I'm guessing they treated you like shit, right? They paid you poorly, and maybe sometimes the paychecks didn't arrive, or they bounced, or they docked you pay for bogus reasons? Scam artists usually treat their employees very badly. They probably also harassed you, belittled you, screamed at you. Scam artists tend to be sociopaths. A lot of them are sexual predators. A lot of them get off on demeaning other people over whom they have power.

Did any of that happen to you? Is it happening right now? Did you work hard, and they ripped you off?

I can help you.

I will help you by finding the right place to file complaints if they ripped you off on your pay (the Washington Department of Labor & Industries, for example). I will use my contacts in Washington State, and my audience here, to find competent attorneys in Washington to help you — whether its good lawyers willing to work on contingency or lawyers willing to work pro bono. If you worry that you're in the government's crosshairs right now because you participated in a scam, I'll work to find you pro bono criminal defense counsel to protect you and convince the government to see you as a witness rather than as a target for prosecution. In short, I will go to bat for you. I can't practice law in Washington, but I will do everything I can.

All you have to do is help.

By that, I mean that you have to provide the full name of everyone you dealt with at 253-246-8503. You need to provide their home addresses if you have them. If they paid you by check, I'll need a copy of one of the checks so we can see where they bank and under what name and what the account number is. You'll need to provide the names of any corporations or other entities you saw or heard there. You'll need to tell me about assets that the scam-leaders flaunted — the cars, homes, and boats. Finally, I'll want to hear about every scam they were running — every pitch, every bogus company name, everything you were trained to do. I won't ask you to commit to cooperating with the government — that's between you and the attorney I will find for you. But if I'm going to help you, you need to give the scammers up. You can reach me at ken at popehat dot com. I'll be waiting.

Let's take down some scammers. Together.

Edited to add: People in the comments have made the perfectly fair point that the Washington number may be spoofed or forwarded and that the callers may reside physically someplace else entirely, perhaps even overseas. Even so, let's find out what we can, publicize it to make it easier for people to find on the internet, and follow up on the leads. If there are readers in, say, Pakistan who are employees of this enterprise and want to drop a dime on it, I don't have as many contacts there, but I will do what I can for you.

A Sincere Apology To R. In California

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Dear R.,

You work in accounting for a large company. Today you sent an email to a vendor, saying that the IRS had rejected a 1099 submitted in connection with that vendor because the tax ID number was wrong, and asking them to fill out a W-9 and return it to you.

Apparently you are a Popehat reader, R., and had our page open at the time. By some mischance, the email was sent to ken at popehat dot com rather than the vendor, whose email address you had searched for.

When I received an email stating that a large company had paid money to us in 2010 and that the company just needed our tax information to file a 1099, I was somewhat skeptical. Nobody pays Popehat anything, R., because nobody at Popehat does anything. Right now, Patrick is sitting on the couch watching a "Mamma's Family" rerun.

I've now satisfied myself through online methods that you were being truthful, and your email was an accident, not a scam. So in retrospect, R., when I sent back an email asking whether you really really meant to do this thing, this thing we have here, with me, and invited you to visit this link and peruse it, and suggested that I would be speaking with you real soon now, I recognize that my tone was brusque and my implications unpleasant, and that I may have caused some anxiety.

I'm sorry about that, R.. You take me as you find me on any given day.

Best wishes, and thank you for reading,

Ken

Anatomy Of A Scam Investigation: Chapter Eight

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The index of prior chapters is here.

Investigating a large-scale fraudulent enterprise can be tedious, time-consuming, and expensive. Pretty soon you run out of low-hanging free fruit (as I've covered in prior chapters) and you have to start spending real time and money — paying to pull public documents not available online, contacting live witnesses and meeting with them, re-checking your work for missed opportunities, waiting for developments in cases, etc. We're in that stage now. But rest assured the series will continue.

For now, an update, and a new variation on the theme.

(more…)

Anatomy of a Scam: Chapter Seven

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[Wondering what's going on here? Check out the Chapter Index on this series.]

It's time for another chapter of my discussion of how to investigate a scam, using UST Development and its principals as an example.

I've gotten sick of repeating all the prior chapters, so I've put them in an index post. Here it is: Index of "Anatomy of a Scam" Chapters.

In this chapter, I'm going to talk about two things: follow-ups and criminal records.

(more…)

Anatomy of A Scam: Chapter Index

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Here's the index for the Anatomy of Scam series:

      • The prologue: I receive the UST Development, Inc. invoice, write an email, and get a response.
      • Chapter One: UST Development, Inc. sends me a bogus invoice. I explain why it's fraudulent and talk about the purpose of this series.
      • Chapter Two: I discussed online search methodology and Google search techniques.
      • Chapter Three I examined some Google search results for UST Development, Inc. and its principals and tried to chase down different entities.
      • Chapter Four I pointed to some signs that the Better Business Bureau and the public have caught on to the UST Development scam, and further discussed the reason for this series.
      • Chapter Five: I talked about searching state court records for UST Development and its principals and affiliates, including David Bell, and also examined PACER records for corroboration of fraudulent intent and trends of con-man behavior.
      • Chapter Six:  I talked about the optimal methods of reporting a scammer.
      • Chapter Seven:  I discussed PACER records of trademark actions against the principals of UST, and examined criminal records of David Bell.
      • Chapter Eight:  Tipsters emerge, and I corroborate a tip with lawsuits and Fictitious Business Name records.
      • Chapter Nine: More tipsters emerge, and David Bell starts using a new entity.
      • Chapter Ten: Bell and UST try new variations on their scheme across the American West.
      • Chapter Eleven: North Dakota issues a cease and desist order, the fraudulent invoice language morphs, and the scam spreads as far as Louisiana.
      • Chapter Twelve: New York State joins the party, and the fraudulent invoices continue.
      • Chapter Thirteen: Connecticut settles with UST, and the fraudulent invoices continue.

 

See also my important note about the series.

Anatomy of a Scam Investigation: Chapter Six

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[Wondering what's going on here? Check out the Chapter Index on this series.]

Welcome to Chapter Six of "Anatomy of a Scam Investigation." A quick review:

 

  • In Chapter One I talked about first contact by UST Development, Inc., and explained why their bogus invoices are clearly fraudulent;
  •  In Chapter Two I discussed online search methodology and Google search techniques.
  • In Chapter Three I examined some Google search results and tried to chase down different entities.
  •  In Chapter Four I pointed to some signs that the Better Business Bureau and the public have caught on to the UST Development scam, and further discussed the reason for this series.
  • In Chapter Five, I talked about searching state court records for UST Development and its principals and affiliates, including David Bell, and also examined PACER records for corroboration of fraudulent intent and trends of con-man behavior.

 

In this Chapter of the series, I'm going to discuss effective reporting of scams, using the UST Development, Inc. fraudulent invoice scam as a model. Our goal, throughout, is to get appropriate authorities to investigate and prosecute crime, to prevent further victimization, and to assist past victims in getting compensation.

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Anatomy of a Scam: Important Note

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A person I have mentioned in this "Anatomy of a Scam" series claims that her family is being harassed as a result of it. She claims increased car traffic near her house, and believes that this traffic represents harassment. She reports harassing phone calls, including someone posing as a police officer, whose number came back to a computer shop in Laguna.

Frankly, I'm not inclined to believe anything this person says without hard proof, in light of what I've seen in the course of the investigation. I specifically doubt this claim.

But if it happened, such harassment is absolutely unacceptable to me. I said that already, and I meant it. If you make harassing calls or drive-bys or any other form of harassing contact, you are part of the problem. You are my foe, and a foe of the detection, investigation, and exposure of fraud. Don't do it. The proper remedy for fraud like that exposed in this series is reports to the authorities, and publicity designed to expose and deter it.

I will cooperate with any law enforcement inquiries into any actual harassment. I am not legally obligated to do so, or even to post this notice. But I will. Ask yourself: based on this series, what is Ken likely to do to me if I use the information in his posts to behave badly?

I'm asking this person for the number of the computer store that was allegedly the source of the harassing call. If I get it, I will investigate accordingly. Both telephone harassment and posing as law enforcement are crimes in California. Conduct yourselves accordingly.

Anatomy of a Scam Investigation: Chapter Five

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[Wondering what's going on here? Check out the Chapter Index on this series.]

Welcome back! In Chapter One we met UST Development, Inc., aka US Telecom, and its principal David Bell, and talked about why the bogus invoices they are sending out constitute mail fraud. In Chapter Two we talked search preparation and Google search techniques. In Chapter Three we reviewed some Google search results and tried to chase down different entities. In Chapter Four I identified some signs that the Better Business Bureau and the public have caught on to the scam, and discussed what the point of this exercise might be.

That was all free. Today we spend a little money. But not much, in the grand scheme of things.

Before I get to that: please do not try to call these people or drive past their home or business or harass and torment them in any way. We're the good guys; they are the bad guys. Let's keep it that way, and concentrate on investigation, warning potential victims, providing resources to existing victims, and prodding the government to take action. However, any searches you all would like to do would be welcome — crowdsourcing is fatal to scammers. And remember, scammers are . . . anyone? anyone? That's right. Scum.

This is the longest chapter yet. Sorry about that. There's a lot to cover.

(more…)

Anatomy of A Scam Investigation, Chapter Four

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[Wondering what's going on here? Check out the Chapter Index on this series.]

This will be a brief chapter.

In Chapter One I discussed the fake-invoice mail fraud scheme operated by UST Development, Inc. and its principal David Bell. In Chapter Two we discussed Google search techniques and useful sites like the Better Business Bureau. In Chapter Three we discussed some Google search results suggesting how widespread the fraud is, and the possibility that the same principals had conducted fraud under other names.

This chapter just has a couple of short updates.

First, the Better Business Bureau of Southern California is doing an admirable job: they got so many complaints about UST Development, Inc. / US Telecom, Inc. in a short time that they put up a well-crafted front-page warning about it:

In only the past two weeks, the Better Business Bureau of the Southland has received 18 consumer complaints–more than one every day–against US Telecom. Complainants report that they receive an invoice for $175.00 from the Ontario-based company for what is described as “Telecom Maintenance/Service Call.” No further information other than the company's phone and fax numbers, website, and address is given.

Most complainants say they never requested the service described and that no one from the company ever came to their facility. A recorded message informs those who call to ask about the invoice that their call will be returned within 48 hours, but complainants say that it can be several days before the return call, if, indeed, there is one at all.

US Telecom responds to customer inquiries by explaining that their invoice is for services it “can” provide, that they offer services the customer's telephone company does not, that the invoice was sent in error, that it's for maintenance coverage, that it's an advertisement and not a bill, etc.

Complaints received so far are all from residents of Los Angeles, Orange, Riverside and San Bernardino counties.

The invoices US Telecom sends out are a ploy, commonly known as a solicitation in the guise of an invoice, designed to collect payments from businesses that pay, often in the belief that someone within their company requested the service, without checking further.

Nevertheless, the Better Business Bureau cautions, you should realize that federal law requires such solicitations to disclose, on their face and in 30-point or larger, boldface type, that they are solicitations. At the same time, scam artists will probably disregard that requirement, so you should also realize that the absence of the required notice does not necessarily mean the invoice is legitimate.

The BBB expects US Telecom's complaint numbers to climb and advises careful review of such invoices before paying. You can and should get a reliability report from the BBB, also before paying, which will tell you if the company has complaints against it. If you do pay and later realize you shouldn‘t have, you may also complain to the BBB. You can request a reliability report or file a complaint at http://www.la.bbb.org/ or by calling (909) 835-6064.

The BBB's summary tells us a few things about the scope of the scam:

1. David Bell is apparently using US Telecom and UST Development, Inc. interchangeably.
2. Only a tiny, tiny percentage of people who notice a scam report it. If the BBB got 18 complaints in as many days, the scope of the mailings is vast. [Federal defense lawyer joke: someone is going to learn the hard way the distinction between actual and intended loss.]
3. The different excuses/lulling/put-offs told to different victims is classic boiler-room-fraud behavior.
4. The complaints are clustered in a tight time range. This mail fraud scheme is breaking down very quickly.

Second, this series is drawing sizable search engine hits, which indicates that a lot of people are researching UST Development, Inc., US Telecom, and David Bell. A taste of the hits since September 10:

ust development ontario — 12
ust development scam — 3
www.ustdevelopment.com — 13
david bell ust — 3
ustdevelopment.com — 9
david bell ustdevelopment.inc
branden bell ontario ust
ust development fraud
fake invoice from ust development
ust development, inc, preventative maintenance
ust development scam invoices

. . . and many more.

My point? Well, scammers are scum. You knew that. But also, my point is that you can make a difference by writing on the internet. Two and a half years ago we linked to and discussed Kathleen Seidel's awesomely researched investigation of the Autism Spectrum Disorder Foundation, a "charity" nominally raising money to benefit autism research but actually organized for the profit of telemarketers. Even though Kathleen did all the work, since we wrote about it, there have been almost a thousand search hits for "Autism Spectrum Foundation Foundation." It's the fourth most searched term on the site, after popehat (for people who forget our tricky url), Hermon Raju, and Tonya Craft. And hopefully, many of those thousand people followed our link to Kathleen Seidel's investigation and as a result donated their money to a real charity.

I hope that even a handful of people find us and don't send money to David Bell and UST Development — now, or when he rolls out his next scam. And I hope that even a handful of people will look at this and decide that if a big dummy like Ken can do this, they can, and will call out some other fraudsters. Join the good fight.

Edited to add: Welcome visitors from BoingBoing and Metafilter. Hope you enjoy the series. Coming soon: information gleaned from bankruptcy court records, and how and to whom to report scammers.

Edited to add: Chapter Five is up.

Additional update: please read this important note.