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Canadian Scam Sold Phony Bonds to U.S. Seniors

The Federal Trade Commission has charged the operator of a Vancouver, Canada-based telemarketing operation with targeting elderly U.S. consumers in connection with offering nonexistent foreign bonds and supposed cash prizes.

According to the FTC, John Raymond Salvator Bezeredi falsely promised consumers that after buying the bonds, they would be entered into monthly drawings and that they were very likely to receive substantial cash winnings or receive regular cash payments.

Few, if any, consumers ever received such payments after buying the "bonds," leading the Commission to charge Bezeredi with violating the FTC Act and the Telemarketing Sales Rule (TSR). He also has been charged with illegally calling consumers on the National Do Not Call Registry maintained by the FTC and the Federal Communications Commission.

The complaint was filed against Bezeredi, individually and doing business as Dominion Investments, Eurobond Fidelity Ltd., and Imperial Investments -- the names under which the bonds were marketed.

On October 17, a federal district court in Seattle issued a temporary restraining order barring the defendant’s allegedly illegal conduct, pending the resolution of the Commission’s complaint.

Along with the FTC’s complaint, a simultaneous civil action against the defendant was filed in British Columbia, Canada. In addition, Bezeredi was arrested on October 21 in Vancouver, B.C., pursuant to criminal charges filed by the U.S. Attorney’s Office for the Central District of California.

The Allegations

The FTC contends that Bezeredi, through his Canadian telemarketing operation, contacted mostly elderly U.S. consumers, offering them the chance to invest in European bonds involving monthly cash prize drawings.

Telemarketers allegedly told consumers they were highly likely to receive regular cash winnings of at least $50 if they bought the bonds over the phone. At times, telemarketers called consumers more than once in an attempt to persuade them to send multiple payments for additional bonds.

Consumers also received an information sheet stating that their bond purchase is registered with the "European Central Union Bank."

Unfortunately, for the consumers who bought the "bonds," there is no "European Central Union Bank," and the European Central Bank, which sets monetary policy in the 12 European countries that use the Euro as legal tender, does not operate a prize bond program.

According to the FTC, consumers paid Bezeredi between $400 and $5,950 each to buy the foreign "bonds" his telemarketers were pitching. Most consumers who sent money received nothing of value in return.

(Article courtesy of ConsumerAffairs.com)

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