FTC: Florida man collected funds for India-based scam telemarketers

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'Runners' raced around scooping up funds before consumers could change their minds

Many telemarketing scams originate overseas but, as a recent case involving a Florida man shows, there are often U.S.-based accomplices who keep the cash spigot open.

The case involves Joel S. Treuhaft and his company, PHLG Enterprises, LLC. The Federal Trade Commission (FTC) charged that they collected more than $1.5 million from about 3,000 consumers in a scheme that helped Indian call centers conduct IRS tax scams, government grant scams, and advance-fee loan scams, among others.

“The scammers behind these call centers relied on PHLG and its runners to get consumers’ money,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection.  “Stopping companies that assist and facilitate fraud remains a top FTC priority.”

Bogus bills

The FTC said that telemarketers at Indian call centers conned consumers into paying hundreds or thousands of dollars each for taxes they did not owe, or fees for services they did not receive. They often pretended to be affiliated with government agencies, telling people they owed money to the IRS, or that they would get a government grant after they paid a fee.

The consumers paid via Western Union or MoneyGram cash money transfers, making it difficult for them to trace their payments or obtain refunds. The defendants paid “runners” to collect the money at retail stores that offer money transfer services. 

Using text messaging, the Indian call centers dispatched runners to pick up the money as quickly as possible so that consumers would not have time to cancel or reverse the money transfer if they became suspicious.

Some runners lied to store employees to retrieve a consumer’s money, including saying they were the consumer’s friend or relative. The runners went to various stores every day, for eight to 10 hours per day, to collect consumers’ money, the agency said, keeping a portion of each payment as their share of the "take."

Under the FTC order, Treuhaft and his company are banned from working with telemarketers. The order imposes a $1.5 million judgment that will be suspended based on the defendants’ inability to pay. The full judgment will become due immediately if they are found to have misrepresented their financial condition.

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