Viewing cable 06MONTREAL255, MONTREAL-BASED TELEMARKETING SCHEMES TARGET

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INFO RUCNCAN/ALCAN COLLECTIVE

UNCLAS SECTION 01 OF 03 MONTREAL 000255 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: KCRM PREL ECON CASC CA
SUBJECT: MONTREAL-BASED TELEMARKETING SCHEMES TARGET 
AMCITS 
 
 
MONTREAL 00000255 001.2 OF 003 
 
 
This message is Sensitive but Unclassified 
 
¶1. (U) Summary. Montreal's relatively cheap labor and 
energy costs combined with strict privacy laws and lax 
telemarketing regulations have made it an attractive 
location for contact centers of all kinds, and the city 
now finds itself second only to Toronto for the dubious 
title of "telemarketing scam capital of North America." 
Fraudulent telemarketing operations based in Canada 
cause an estimated annual loss of $700 million and 
frequently target elderly U.S. Citizens. Project COLT 
brings together Canadian and U.S. law enforcement 
officials to identify and dismantle fraudulent call 
centers and return funds to telemarketing victims. End 
Summary. 
 
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Attractive short-term employment 
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¶2. (U) Help wanted adds in Montreal newspapers are 
dominated by announcements of job openings in 
telemarketing, and many students turn to these as a 
source of quick income. Call center employment tends 
to have an extremely high turnover rate, and legal and 
illegal call center operations are constantly seeking 
new employees. "Students welcome," reads one ad, 
"Instant verifications. Eight positions to fill." Many 
English-speaking immigrants, who may find that their 
previous job competencies are not recognized in Quebec, 
or that their lack of French language skills 
disqualifies them for many jobs, often turn to 
telemarketing as a last resort. These advertisements 
tend to lead job seekers to a "boiler room," an office 
building crammed with computers and phones, on which 
telemarketers peddle their virtual wares, frequently to 
U.S. citizens. 
 
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Collecting names. and making the "pitch" 
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¶3. (U) So called "leads brokers" compile lists of the 
names, addresses, telephone numbers (and, frequently, 
bank account information) of U.S. residents. These 
"leads lists" vary in price depending on the amount of 
information contained on each potential target, with 
the most expensive lists containing bank and credit 
card information as well as other personal data about 
those listed. Leads brokers sometimes compile these 
lists by placing generic ads at the back of U.S. 
magazines (with captions such as "International 
Lottery: Enter Now") asking readers to submit their 
name, address, and phone number. Leads brokers then 
sell these lists to telemarketers who call those listed 
and, with a variety of pitching techniques, tell 
customers that they have won a lottery or some other 
prize. 
 
¶4. (U) Often, illegal telemarketers choose to aim 
their "pitch" at elderly U.S. citizens, who may be less 
likely to question the information given by the 
telemarketer. In some instances, the telemarketer will 
tell the U.S. citizen that they have won an 
international lottery or some other prize that requires 
"customs clearance" before it can reach them. The 
telemarketer requests that the target send a certain 
amount of money (via Western Union) to a particular 
address, promising that the cash prize or boat will be 
delivered to the person shortly thereafter. Once the 
target has sent in their money, and does not receive 
any prize, they may try to follow-up on their payment. 
But in most (if not all) cases, the money has already 
been picked up by someone involved in the scheme and it 
is already to late to recover the funds. 
 
¶5. (U) A telemarketing scheme relies on distinct but 
interlinked agents to complete different aspects of the 
transaction. For many of these illegal telemarketing 
schemes, each of the actors other than the Montreal- 
based call center is located in the U.S. From the 
leads brokers compiling the lists of potential victims 
to the actual telemarketers on phones pitching their 
services, to the brokers who close the deals and take 
bank or other payment information, to the "third party 
processors" who actually take the money out of people's 
accounts, the multiple layers of action makes it much 
harder for law enforcers to point blame. Like a 
"circle with spokes" each part of the telemarketing 
scheme feeds off the others and is required for the 
process to finish. And yet the members of each 
particular group can claim a certain amount of 
 
MONTREAL 00000255 002.2 OF 003 
 
 
ignorance as to the ultimate impact of their actions. 
And, in many cases (according to post law enforcement 
officials) the individuals working the phones in a 
telemarketing outfit might not even recognize that they 
are part of an illegal scheme. 
 
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"You have won an international lottery" 
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¶6. (U) In some cases, telemarketers take on the 
identity of U.S. attorneys and call people who have 
already been victims of telemarketing schemes that they 
can help them "recover the money" that they have 
lost-for a fee. In other cases, call centers will 
target people with bad credit and offer them credit 
cards or loans with the stipulation that the victim 
must first supply bank information or check information 
in order to qualify for the loan or credit card. Other 
telemarketers will use the names of well-known 
charities or pretend to be raising money for police or 
firefighter organizations in order to solicit funds 
from victims. They may also claim to be investors 
seeking funds for "lucrative" real estate or banking 
programs or offer a "renewal" of an existing magazine 
subscription. 
 
¶7. (SBU) Some people have called telemarketing 
schemes like these the "ultimate transborder crime" 
because of how mobile the call centers themselves are, 
and how well the telemarketing companies themselves are 
able to insulate themselves from blame. The fact that 
telemarketing is a multi-jurisdictional crime that can 
elicit attention from multiple levels of government and 
multiple law enforcement agencies can also make it 
harder to U.S. officials to track which agency has 
collected which documents from different telemarketing 
operations to act as evidence in a court case. One 
telemarketing operation might elicit attention from the 
office of ICE, the FBI, the US Postal Service, the 
Federal Trade Commission, the Secret Service, and the 
State Attorney General's Office. 
 
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Montreal-based Operations 
------------------------- 
 
¶8. (SBU) In general, according to law enforcement 
officials at post, organized crime groups (including 
the outlaw motorcycle gang, Hells Angels) have a hand 
in running the larger telemarketing call centers in 
Montreal. The telemarketing call center structures run 
from the largest and most well-organized with more than 
30 employees, to looser networks of individuals on cell 
phones connected only by a hierarchy of anonymity in 
which each employee only knows the person directly 
above him or her in the hierarchy, to the single agent 
with a cellphone making calls on his or her own and 
collecting money by Western Union or cash. 
 
¶9. (SBU) The differences between U.S. and Canadian 
privacy laws and labor costs can help explain why many 
telemarketing schemes would choose to locate their call 
center operations in Montreal. Quebec is a relatively 
liberal province when compared to the rest of Canada 
and has strict privacy laws that make it difficult for 
Canadian law enforcement officials to get access to an 
individual's subscriber information (information that 
is more easily obtained in the U.S. and that can be 
used as evidence against alleged telemarketers). In 
the US, telemarketing scammers can be charged with mail 
fraud, wire fraud, and money laundering. In Quebec 
regulations are significantly more lax. The Royal 
Canadian Mounted Police (RCMP) has the mandate within 
Canada to pursue illegal telemarketers, but in many 
cases lacks the resources to pursue and convict suspect 
operations. 
 
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US-Canadian law enforcement cooperation 
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¶10. (U) ProQ Colt started in 1998 as collaboration 
between U.S. law enforcement and RCMP officers 
targeting illegal telemarketing operations. The task 
force brings together ICE Special Agents, the FBI and 
the U.S. Postal Inspection Service with the RCMP, 
Suret du Quebec, and the Service de Police de la Ville 
the Montreal (SPVM). The U.S. Consulate in Montreal 
has a Special Agent from ICE dedicated full-time to 
working with RCMP officials to identify and disrupt 
illegal telemarketing schemes in Montreal. In 2005, 
 
MONTREAL 00000255 003.2 OF 003 
 
 
project COLT received 1026 complaints from victims of 
these phone scams and led to the arrest of 42 persons 
in the U.S. and Canada. Since its inception Project 
Colt has resulted in the return of more than $15 
million to U.S. and Canadian victims. 
MARSHALL