Toronto link alleged in use of database lists to plunder cash from frail hands

CHARLES DUHIGG
New York Times

The thieves operated from small offices in Toronto and hangar-size rooms in India. Every night, working from lists, they called World War II veterans, retired teachers and thousands of other elderly Americans and posed as government and insurance workers updating their files.

Then, the criminals emptied their victims' bank accounts.

Richard Guthrie, a 92-year-old U.S. Army veteran, was one of those victims. He ended up on scam artists' lists because his name, like millions of others, was sold by large companies to telemarketing criminals, who then turned to major banks to steal his life's savings.

The Iowa resident had entered a few sweepstakes that caused his name to be added to a database advertised by InfoUSA, a major compiler of consumer information. InfoUSA sold data on elderly Americans to known lawbreakers, regulators say.

InfoUSA advertised lists of "Elderly Opportunity Seekers," 3.3 million elders "looking for ways to make money," and "Suffering Seniors," 4.7 million people with cancer or Alzheimer's disease. "Oldies but Goodies" contained 500,000 gamblers over 55, for 8.5 cents apiece. One list said: "These people are gullible. They want to believe that their luck can change."

As Guthrie sat home alone – surrounded by his Purple Heart medal, photos of eight children and mementos of a wife buried nine years earlier – the telephone rang day and night.

"I loved getting those calls," he said in an interview. "Since my wife passed away, I don't have many people to talk with. I didn't even know they were stealing from me until everything was gone."

Telemarketing fraud, once limited to small-time thieves, has become a global enterprise preying upon millions every year, authorities say. Vast databases sold to thieves have put almost anyone within reach of fraudulent telemarketers. And major banks have made it possible for criminals to dip into victims' accounts without authorization, say court records.

"Only one kind of customer wants to buy lists of seniors interested in lotteries and sweepstakes: criminals," RCMP Sgt. Yves Leblanc said.

"If someone advertises a list by saying it contains gullible or elderly people, it's like putting out a sign saying `Thieves welcome here.'"

Two teams of Mounties have been posted to Toronto to investigate this case and other commercial crimes.

The elderly are particularly vulnerable to the thieves who build a relationship and end up tapping their bank accounts and trust funds," Sgt. Michele Paradis said yesterday.

"The elderly get less social interaction, so if someone will build up a relationship with them, they will gain their trust."

Scam artists stole more than $100,000 from Guthrie, his family says. How they took much of it is unclear, because Guthrie's memory is faulty and many financial records are incomplete.

His bank, Wachovia, said in a statement that it had honoured all requests for refunds and was co-operating with authorities.

Guthrie, however, says thieves should never have gained access to his funds in the first place.

"I can't understand why they were allowed inside my account," he said."I just chatted with this woman for a few minutes, and the next thing I knew, they took everything I had."

Investigators suspect Guthrie's name first appeared on a scam list around 2002, after he filled out a few contest entries that asked about his buying habits and other personal information.

The retired farmer had lived alone since his wife died, confined to home by painful arthritis. He spent mornings organizing the mail, filling out sweepstakes entries and listening to big-band albums as he chatted with telemarketers.

InfoUSA maintains records on 210 million Americans, according to its website. In 2006, it collected more than $430 million from clients like Reader's Digest, Publishers Clearinghouse and Condé Nast.

But InfoUSA has also sold lists to a variety of marketers with more dubious intentions, including World Marketing Service, a company that a U.S. judge shut down in 2003 for running a lottery scam.