Current Events in October 2004

A study in the international journal Epidemiologyfinds that people who have used cell phones for at least 10 years may have an increased risk of developing a rare brain tumor.

A research team from the Institute of Environmental Medicine at the Karolinska Institute in Stockholm, Sweden, found that using a cell phone for a decade or more quadrupled the risk of developing acoustic neuromas. The rare tumors generally occurred on the side of the head where the phone was most often held.

"We were surprised by the results," said Anders Ahlbom, professor of epidemiology at the institute and leader of the research team. "We think this is relatively strong data that is not down to chance."

The World Health Organization sponsored the research and medical and technology experts say it's likely to renew concerns about cell phone safety. They say it will be much harder for the industry to stonewall further medical research in this area.

In May 2000, an expert British panel concluded that the weight of available evidence indicated no adverse health effects from the use of cell phones but cautioned that children should only use them in emergencies.

For their part, industry spokesmen downplayed the study, saying it's only one piece of research and that no conclusions can be drawn from it.

The study involved 150 acoustic neuroma patients and 600 healthy people. At least five other studies are said to be underway into a possible acoustic neuromas-cell phone link.

Acoustic neuromas are slow-growing noncancerous tumors that develop on a nerve linking the brain and the inner ear. They can cause hearing loss and can be life-threatening if untreated. They're not very common, occurring in about one person per 100,000 in the general population.

The research team said it found no association between the tumors and heavy cell phone use, but rather on the length of time those in the study had been regular cell phone users.

The Federal Communications Commission (FCC) has cleared the way for electric utility companies to provide consumers with high-speed Internet service over existing power lines. Consumers will be able to tap into the Internet by simply plugging into any electrical outlet.

Known as Broadband over Power Lines (BPL), this method of connecting consumers to the fast lane of the information highway may also help utilities gather critical intelligence to enhance the security, reliability and efficiency of the U.S. electric power grid. It can more quickly detect power outages, automatically read meters and power down non-essential devices in an emergency.

In a formal meeting, the five FCC commissioners affirmed the application of existing technical rules to BPL deployments and implemented additional rules to facilitate continued BPL roll-outs, marking the conclusion of a nearly two-year rulemaking process.

How quickly can consumers expect to see this service offered? Even before the official rulemaking, some companies have been setting up these systems around the country, mainly in areas where traditional high-speed internet service is spotty.

Current Communications Group has formed two joint ventures with Cinergy, a diversified energy company. The first venture will provide a bundle of broadband and voice services to Cinergy's 1.5 million customers in Ohio, Indiana and Kentucky. The second venture will deploy BPL to smaller municipal and cooperatively owned power companies covering 24 million customers across the United States.

"Today's FCC decision is as significant as the Commission's decision a decade ago to foster competition in the mobile telephone and video programming businesses, through PCS and direct broadcast satellite licensing," said William Berkman, Chairman of Currcent Communications Group.

"BPL is a high-quality alternative that transforms every in-home power outlet into a broadband outlet and will help bridge the gap in services to America's underserved communities. Furthermore, it enables electric utilities to enhance their systems' reliability and broaden their service offerings efficiently through a single general communications network built on their existing infrastructure," Berkman added.

October 13, 2004
Giant Bicycle Inc. is recalling about 160 Rainier Mountain Bicycles. The front brake mounting tabs can break, causing the brakes to fail and the rider to lose control of the bicycle.

The company has received six reports of the tabs breaking. No injuries have been reported.

The recall involves only 2004 Rainier model mountain bicycles with Marzocchi EXR Comp front forks. Model numbers included in the recall are 333502, 333503, 333504 and 333505. The bicycle is blue and silver and is made of aluminum. The names Giant and Rainier are printed on the frame of the bicycle. Earlier models of this bicycle are not included in this recall.

The bikes were sold by authorized Giant Bicycle dealers nationwide from February 2004 through March 2004 for about $850.

Consumers should contact Giant Bicycle to determine whether their bicycle is included in this recall. Authorized dealers who sold these bicycles will schedule an inspection and free repair.

Consumer Contact: Contact Giant Bicycle at (866) 458-2555 between 9 a.m. and 5 p.m. PT Monday through Friday, or go to the firms Web site at www.giantbicycle.com

The recall is being conducted in cooperation with the U.S. Consumer Product Safety Commission (CPSC).

Attorney General John Ashcroft today announced the arrest of more than 135 individuals worldwide in what he said was the most extensive multinational enforcement operation ever directed at telemarketing fraud schemes.

The ongoing action, known as Operation Roaming Charge, began on Jan. 1, 2004, and uncovered schemes involving every major category of telemarketing fraud: bogus lottery, prize and sweepstakes schemes; offers of nonexistent investments; bogus offers of pre-approved credit cards or credit-card protection; employment and business opportunity swindles; tax fraud schemes; and recovery room schemes, in which criminals pretend to be members of law enforcement agencies who can help telemarketing fraud victims recover some of their losses if they pay bogus fees.

The operation resulted in the arrest of more than 100 individuals in the United States, and an additional 35 arrests in other countries. More than 190 U.S. and Canadian search warrants were executed as part of the operation, and 70 individuals have been convicted in the United States to date. In addition, state attorneys general have brought 279 criminal, civil and regulatory actions against illegal telemarketing operations.

The Roaming Charge cases demonstrate that telemarketing fraud schemes have become increasingly international in scope and more sophisticated in the use of methods and techniques.

A number of the cases also demonstrated that organized criminal operations are engaging in telemarketing fraud. The results of more than 100 separate investigations led to the discovery of more than five million victims, who suffered losses totaling more than $1 billion.

These cases show how ruthless criminal telemarketers can be in victimizing members of the public, especially the most vulnerable segments of our society, said Attorney General John Ashcroft. Operation Roaming Charge sends the message that law enforcement agencies in the United States and abroad are committed to working together to track down these criminals and bring them to justice.

Operation Roaming Charge shows that there will be no safe haven for telemarketing criminals, said Assistant Attorney General Christopher A. Wray of the Criminal Division. As the operations name suggests, no matter where fraudulent telemarketers roam to conduct their schemes, we will find them and prosecute them to the fullest extent of the law.

These cases illustrate the devastating impact unethical telemarketers have on the financial security of many Americans, said Chris Swecker, FBI Assistant Director, Criminal Investigative Division. The FBI recognizes the efforts of the prosecutors and dedicated law enforcement agencies worldwide that made Roaming Charge such a success. This partnership approach serves as a model of how to most effectively address global crime problems facing the international community.

We will continue to target illegal telemarketers and those who knowingly assist them, such as bank processors and list brokers, said Deborah Platt Majoras, Chairman of the FTC. Joint law enforcement initiatives like Operation Roaming Charge should send a clear signal to con artists that we will find them and we will stop them.

Telemarketing fraud remains a Top Ten Consumer Complaint on NAAGs annual survey of consumer issues, said William Sorrell, Vermont Attorney General and National Association of Attorneys General. Since the start of this year, at least 30 state attorneys general have successfully investigated and taken 279 enforcement actions to shut down fraudulent telemarketers both here and in Canada.

The operation also involved civil and regulatory actions by various federal and state agencies. The FTC filed 27 telemarketing-related civil complaints, 26 of which challenged some form of deceptive or unfair telemarketing practice and one of which involved the FTCs Do-Not-Call regulations.

During the period of the operation, the FTC also obtained 28 federal court judgments. In addition, the Commodity Futures Trading Commission filed 14 actions alleging telemarketing fraud in the solicitation of purchases of commodity futures or options, including foreign currency. This total represents about a third of the enforcement actions that the CFTC instituted in 2004.

Of the civil actions commenced that involve telemarketing, the CFTC obtained emergency relief - including asset freeze orders - in six actions, and preliminary injunctions in three. Finally, the U.S. Postal Inspection Service conducted seven administrative actions and obtained one civil fraud injunction in telemarketing fraud cases.

Some of the charges filed in districts throughout the country include:

New York

In the Eastern District of New York, a superseding indictment was unsealed that included charges against 10 individuals - including an alleged capo, a soldier and associates in the Gambino crime family - for their role in a telephone cramming scheme that allegedly generated approximately $500 million in gross revenues.

The scheme allegedly involved placing of unauthorized charges on the local telephone bills of millions of consumers. As a result of increasing consumer complaints, several defendants and others allegedly created a call center, in which the operators were directed initially to attempt to sustain the bogus charges by persuading customers that the charges on their phone bills were authorized.

Southern Illinois

In the Southern District of Illinois, three Toronto residents - Lloyd Prudenza, David Dalglish and Leslie Anderson - were indicted on 24 counts of mail fraud, wire fraud and conspiracy for their alleged role in a pervasive Canadian telemarketing operation known as First Capital.

First Capital allegedly made unsolicited telephone calls to residents of the United States during 2001 and 2002 representing that they were providing Master Card and Visa credit cards to individuals with less than perfect credit for an advance fee payment ranging from between $189 and $219.

The defendants allegedly did not provide consumers with the credit cards as promised, but instead provided them with a package stuffed with advertisements in the form of merchandise coupons and promotional literature for various products. Approximately 35,000 individuals were victimized with approximately $7 million in losses.

Arizona

An indictment was unsealed that charged six defendants for their roles in a telemarketing fraud scheme that allegedly promised consumers that they would receive a credit card in exchange for payment of more than $200. The scheme allegedly had more than 57,000 victims including senior citizens, who lost a total of $5 million.

Minnesota

Victor Wilcox, the ringleader of an advance-fee credit-card scheme that defrauded more than 50,000 people nationwide of more than $2.7 million, was sentenced to eight years and four months imprisonment and ordered to forfeit nearly $2 million. Wilcox owned Approved Credit Alliance (ACA), which falsely advertised guaranteed no-deposit Visa and MasterCard credit cards in the classified sections of newspapers and periodicals circulated across the United States.

In fact, ACA never had authority to issue credit cards and had no relationship with any credit card company or issuer. Those who contacted ACA were asked for their bank routing codes and checking and savings account numbers, purportedly to prequalify them for the credit cards. ACA used these bank codes to electronically debit a program fee ranging from $49 to $129, and $19 per month, until the customer told ACA to stop. From May 1998 through October 2000, Wilcox and three co-defendants stole more than $2.7 million from the savings and checking accounts of tens of thousands of victims nationwide.

Rhode Island

Marilyn Cruz and Shanta Garner were sentenced to 41 months and 51 months imprisonment, respectively, for their roles in bilking elderly victims out of more than $437,000 through a fraudulent sweepstakes scheme. The two women called dozens of elderly victims and advised them that they had won large sums of money in sweepstakes drawings - prizes purportedly ranging from $100,000 to $19.3 million.

The women told their victims that, to secure the prizes, they had to pay advance fees, often described as taxes and processing fees. Once a victim was on the hook for advance fees, the defendants continued calling, asking for more fees. They advised their victims to send the money via Western Union or other wire transfer carriers to various locations, including addresses in Rhode Island, Massachusetts, Florida and the Bahamas.

California

Charles Dike, a Nigerian national, was extradited from Nigeria to the United States for his alleged role in a Canadian-based telemarketing fraud scheme. Dike allegedly was part of a group - consisting primarily of Nigerian nationals who operated out of Vancouver, British Columbia - that conducted a fraudulent lottery scheme targeting elderly U.S. residents.

Prospective victims were called and told that they had won the Canadian lottery and were directed to send taxes and processing fees to Canada. More than 1,700 victims of the scheme had known losses of more than $3 million. The Nigerian Economic and Financial Crimes Commission assisted U.S. authorities by arresting Dike and facilitating his extradition.

Nevada

A federal bankruptcy court entered a permanent injunction against a telemarketing firm, National Audit Defense Network, which allegedly sold abusive tax schemes. Court papers indicate that hundreds of thousands of the firm's customers underpaid $324 million in federal income taxes over the past three years alone.

Virginia

Terry Dowdell, the former owner of a Bahamian shell corporation and ringleader of a fraudulent prime bank/high-yield investment scheme that caused more than $70 million in losses, was sentenced to 15 years in prison.

Dowdell and others used telemarketing, faxes and other media to market an investment program that falsely promised annual profits of 160 percent from trading certain bank debentures supposedly issued by major money-center banks (prime banks) located in North America or Western Europe. In fact, no trades or investments were made by Dowdell's Bahamian corporation, and any payments to investors were from other investor funds.

Florida

Tim Day, a defendant in a fraud scheme that falsely claimed to solicit funds for charitable causes - such as law enforcement, firefighter and veterans organizations - was sentenced to 10 years in prison. Over more than two years starting in 1999, the scheme had targeted elderly citizens and raised more than $600,000 from more than 10,000 victims. The proceeds were never used to benefit any of the agencies mentioned in the pitch and were ultimately converted to the personal use of the fraudsters.

According to a 2003 study by the AARP Foundation, telemarketing fraud is a pervasive white-collar crime in the United States. The Federal Trade Commission reports that telemarketing fraud-related complaints accounted for 19 percent of all consumer fraud-related complaints that the FTC received in 2003 and the first half of 2004. For that same period, consumer complaints to the FTC about telemarketing fraud reported losses in excess of $190 million.

Moreover, many telemarketing fraud schemes depend on the repeated victimization of the elderly. Foreign-lottery scheme victims who were interviewed for the AARP study, for example, had an average age of 74.5 years. Finally, FTC complaint data show that fraudulent telemarketers preferred method of obtaining consumers money is bank account debiting. For the first six months of 2004, 46 percent of telemarketing complaints filed with the FTC reported paying by bank account debit, compared to 18 percent paying by credit card, the next largest category.

Victims of telemarketing fraud schemes should file complaints with the Federal Trade Commissions Consumer Sentinel, either by calling the FTCs toll-free number, 1-877-FTC-HELP, or by filing an online form available through its website, Victims of Canadian-based telemarketing schemes may also contact PhoneBusters, the Canadian national call center, at 1-888-495-8501 or

Pest exterminator Orkin is swatting some pests of its own. A consumer lawsuit seeks to represent 65,000 Florida customers and the state's attorney general is reported to be investigating racketeering allegations against the company.

To make matters worse, a federal judge also recently upheld a multimillion-dollar arbitration judgment in favor of an Orkin customer from Ponte Vedra, Fla., and it's reported the firm has been the target of 15,000 complaints in Florida over the last four years.

Florida Attorney General Charlie Crist has issued a subpoena for Orkin's records and documents, but won't discuss the case. The Orlando Sentinel reported that complaints include hard-to-decipher guarantees, inadequate termite treatment and inspection, routine denial of claims and failing to require subcontractors to get required building permits for termite repairs.

The consumer lawsuit accuses Orkin of deceptive and unfair trade practices. An Oct. 14 hearing in Hillsborough County Circuit Court will hear the plaintiffs' argument that the suit should be a class action representing 65,000 Orkin customers in Florida.

Just last year, Orkin settled a $6.7 million lawsuit involving a termite-damaged apartment complex in Hillsborough County. Terms of the settlement are confidential.

In the arbitration case, customer Collier Black presented evidence that in making termite repairs to his home, subcontractors had not obtained the required building permits. He won a $4.25 million judgment at a 2003 arbitration hearing, which a federal judge later reduced to $2 million.

The arbitration panel ruled in Black's favor after Black's attorneys uncovered hundreds of similar cases in north and central Florida.

It was apparently Black's case that caught Crist's attention. He opened a racketeering investigation in April, issuing a subpoena requesting company records and documents.

Inflation may be under control, but nursing home costs continue to skyrocket. A major insurance company says the average daily cost of a private room in a nursing home in the United States is $70,080 per year, or $192 per day.

The highest rates were reported in the state of Alaska where the cost is $204,765 per year or $561 per day on average. The lowest rates were found in Shreveport, Louisiana at $36,135 per year or $99 per day.

The average length of stay in a nursing home for current residents is 2.4 years, which makes the average cost of a nursing home stay approximately $168,192. The data is contained in the 2004 MetLife Market Survey of Nursing Home and Home Care Costs.

The study also found that the cost of a home health care aide averaged $18 per hour nationally. Home health care is most expensive in Hartford, Connecticut at $28 per hour and least expensive in Shreveport, Louisiana and Jackson, Mississippi where rates are $13 per hour on average.

According to the 2003 MetLife Market Survey of Nursing Home and Home Care Costs the average daily rate for a private room in a nursing home was $181 per day or $66,065 annually. The hourly rate in 2003 for a home health aide was $18.

"The cost of long-term care continues to rise," said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute. "Whether one chooses care at home or care in a nursing home, the costs can be exorbitant. As people prepare for their retirement and assess their asset and income requirements, it is also essential that they plan for the possibility that they will need assistance with day-to-day living. Unanticipated long-term care costs can derail an individual's financial plan; long-term care insurance may be a solution," said Timmermann.

People are living longer, but long life may not be accompanied by good health. In 1940, a 65-year-old woman could expect to live an additional 14.7 years; by 2000 a 65-year-old woman could expect to live another 19.5 years, and by 2040 women are expected to live an additional 22 years.

Chances increase that as people age they will develop a chronic condition or physical or cognitive disability for which they will require assistance. For example, almost 38% of people aged 65 and over are diagnosed with a severe disability, and 47% of those aged 85 and older have Alzheimer's Disease or another form of dementia.

Approximately 1.6 million people reside in 18,000 nursing homes in the United States with just under 10% of the residents people aged less than 65 years old and 46.5% aged 85 years and over, according to the National Center for Health Statistics. Most residents (72%) are women and three-quarters require assistance with three or more activities of daily living.

More than 1.3 million patients received home health care services from 7,200 agencies in 2000, with more than half receiving help with at least one activity of daily living. Seven in ten patients were ages 65 and older, and 65% were women, according to the National Center for Health Statistics.