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UNITED STATES POSTAL INSPECTION SERVICE

For further information call:
Postal Inspector Paul Krenn: (703) 292-3803
pjkrenn@uspis.gov

Pam Lambo, Canadian Embassy: (202) 682-7713
pam.lambo@international.gc.ca

Jackie Dizdul, FTC Office of Public Affairs
(202) 326-2472


'Fighting Fraud: It's a Family Matter'
U.S. and Canadian Authorities Strengthen Partnership To Combat Cross-Border Scams During National Consumer Protection Week

WASHINGTON, DC, February 6, 2006 - Canada and the United States have historically been strong allies and are the world's largest trading partners. The two countries have a lot in common as North American neighbors. They share similar cultures, enthusiasm for sports and a common border. The border is almost transparent to the citizens of the friendly countries. Unfortunately, the border provides no barrier to fraud schemes that traverse it, targeting victims in both countries. Armed with the Internet and cell phones, fraudsters target victims -- many of them older Americans and Canadians -- in these cross-border schemes. Using false names and electronic tricks, they hide who and where they really are.

The U.S. Postal Inspection Service has partnered with Canadian law enforcement to stop these crimes, but prevention is still the best medicine. During National Consumer Protection Week, February 5-11, Postal Inspectors and the Postal Service's Consumer Advocate are joining other federal, state and local consumer protection agencies to educate the public about cross-border fraud. This year's postal message is "Fighting Fraud: It's a Family Matter."

An increase in fraud complaints from U.S. victims responding to Canadian promotions prompted renewed attention from authorities in both countries, resulting in the establishment of six task forces spanning Canada from Vancouver to Halifax. "The expertise and resources that each agency brings to these initiatives have proven to be effective in identifying, combating and preventing cross-border mass marketing fraud," said Chief Postal Inspector Lee Heath. Since 1998 Postal Inspectors and their Canadian counterparts have shut down fraudulent "boiler rooms" and arrested operators in both countries. Those convicted of fraud have been ordered to pay millions of dollars in restitution to victims in each country.

"The crime of cross-border fraud can be reduced through public education, consumer awareness and vigorous law enforcement," said Bob Goodall, Detective Superintendent, Anti-Rackets Section, Ontario Provincial Police, representing PhoneBusters. Mass marketing fraud crimes are complicated by the multiple jurisdictions involved. "In Canada six regional partnerships have been formed with U.S. Postal Inspectors and the FTC to address the issue of criminals hiding behind our borders and state of the art technology, further stated Goodall.

But cross-border fraud can be a world of trouble for its victims. "Victims are often older citizens, who are particularly vulnerable due to fixed or limited incomes. Many have lost their life savings to unscrupulous telemarketers operating across international borders," said Chief Heath.

One such case is that of Steven Karinch, an 86-year-old widower and WWII veteran from Lebanon, Pennsylvania. Starting in 2003 and continuing for two years, Mr. Karinch was contacted by telephone and mail by various organizations in Canada, advising him that he had won lotteries, prizes, or sweepstakes ranging from $850,000 to $2 million. All the "winnings" required that Mr. Karinch pay an up-front Customs fee, tax, legal fee, or processing cost before receiving his proceeds. Mr. Karinch mailed checks or money orders, wired money, or made bank transfers to cover the fees. All together, he sent over $400,000 to individuals who promised cash prizes upon payment of the fees. When he told operators he was out of money, they told him to "get the money somewhere." Mr. Karinch used his Social Security income and sold stock shares to pay the fees, but never received a dime.

The Postal Service's Consumer Advocate Delores J. Killette said Mr. Karinch's story is not that rare. This year's prevention campaign focuses on seniors like Steven Karinch, but has a second message for the audience. "Older Americans need to be educated to avoid becoming victims of consumer fraud and convinced that it's okay to say "no" to solicitations. But their children, many of which are baby boomers, also need to play a role. They need to keep an eye on elderly parents and grandparents to protect them from scammers. Fighting fraud truly is a family matter." Educated families are the best defense against these fraudsters -- if they recognize the warning signs.

Postal Inspectors encourage consumers to protect themselves by following these tips:

  • Be wary of anything that promises large sums of money, such as sweepstakes or lottery winnings, in exchange for your advance payment, donation or investment.

  • Don't be pressured into making a decision about an offer. Check it out first!

  • Be cautious about businesses that try to conceal mailing addresses and phone numbers and evade questions about operations.

  • Be aware that if you respond to even one of these "offers," your name will be added to a "mooch" list by criminals. These are contact lists, similar to those used by legitimate businesses. Criminals use the lists to track people who have fallen for past scams. They are bought and sold by criminal enterprises, and you can count on being targeted again.

For more than 225 years, the U.S. Mail has been one of the safest and most efficient ways for Americans to do business. The Postal Inspection Service works to maintain that trust. Last year, Postal Inspectors investigated 3,502 fraud cases, and Inspection Service analysts prepared over 63,000 letters in response to mail fraud complaints. During that same period, Inspectors arrested 1,577 suspects for fraud.

To learn more about fraud and to order "Nowhere to Run," a free DVD on cross-border fraud prevention, visit www.usps.com/postalinspectors or call toll-free, 1-800-782-6724. For more information on National Consumer Protection Week, visit www.consumer.gov/ncpw and for more information on frauds, visit www.LooksTooGoodToBeTrue.com.

BACKGROUND
Since 1775, the U.S. Postal Service has connected friends, families, neighbors, and businesses by mail. An independent federal agency, the Postal Service touches every address in the country -- more than 144 million at last count -- and millions more around the globe. The Postal Service received and delivered almost 212 billion pieces of mail last year -- letters, parcels, catalogs, and magazines -- through the nation's largest retail network, made up of almost 38,000 Post Offices, retail outlets, and mail processing facilities.

With the addition of the popular Web site, usps.com, just about every computer in every home and every office becomes a personal Post Office -- a gateway to the world. More than 21 million customers each month are enjoying the ease and convenience offered by this service. That's in addition to the more than 7 million customers served each day by the Postal Service's vast retail network.

Annual revenues exceeded $69 billion last year, which was derived solely from the sale of postage products and services -- without the aid of tax dollars. The Postal Service is the world's leading provider of mail and delivery services, offering some of the most affordable postage rates in the world. It handles more than 44% of the world's card and letter mail volume -- delivering more mail to more addresses to a larger geographical area than any other postal system.

Supporting these efforts is the United States Postal Inspection Service. As one of our country's oldest federal law enforcement agencies, founded by Benjamin Franklin, the Postal Inspection Service has a long, proud, and successful history of fighting criminals who attack our nation's postal system and misuse it to defraud, endanger, or otherwise threaten the American public.

As the law enforcement, crime prevention, and security arm of the Postal Service, the Postal Inspection Service is a highly specialized, professional organization performing investigative and security functions essential to a stable and sound postal system. Last year, Postal Inspectors arrested more than 12,000 suspects on charges involving the misuse of the mail, or the abuse of the postal system and its customers.

The Postal Inspection Service strives to make the mail safe, relying not just on its investigations and interventions of suspected criminal activity, but also on aggressive prevention campaigns to help educate consumers about crimes involving the mail. Armed with the right knowledge, most consumers can recognize a fraudulent scheme and make the right decision -- to stay away. An educated consumer is the first line of defense against fraudsters.

From the boiler room to the boardroom, Postal Inspectors work around the clock, enforcing more than 200 federal laws in support of its mission: to protect the Postal Service, its employees and its customers from criminal attack, and protect the nation's mail system from criminal misuse.


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