A Vancouver man was sentenced today to 120 months in federal prison for operating a $12 million telemarketing scheme that preyed on elderly victims by convincing them to purchase his bogus credit card protection plan.
Philip Arcand, 42, was sentenced this afternoon by United States District Judge Dickran Tevrizian.
In April, Arcand was convicted by Judge Tevrizian of two counts of mail fraud and two counts of illegally mailing lottery materials. From at least 1998 until 2001, Arcand ran the Vancouver-based Farpoint Services International, which was a business that processed credit card transactions for various telemarketing operations, some of which were operating scams.
Arcand also hired telemarketing companies to sell his own bogus product to victims throughout the United States. Those telemarketers sold a fraudulent credit card protection program purportedly offered by Arcand’s company, Garrison Assurance.
Arcand’s telemarketers called mostly elderly victims in the United States and fraudulently told them that unless they purchased his credit card protection program they could be liable for massive fraudulent charges placed on their credit cards. The victims were also warned by the telemarketers that computer hackers could break into the computer systems of banks and max out their credit cards and bank accounts, and that the victim would be liable for all the fraudulent charges. (In fact, all major credit card companies hold victims of fraudulent charges liable for a maximum of $50.)
Following a bench trial, Judge Tevrizian found that the credit card protection program and other programs were “illusory products.” Judge Tevrizian found the loss in this case to be $12,843,800. Arcand may also be ordered to pay restitution to his victims, and Judge Tevrizian scheduled a February 3, 2004 hearing to discuss that issue.
Arcand is also under indictment in the Northern District of Alabama, where he is charged with 158 criminal counts, including mail fraud, wire fraud, conspiracy, bank fraud and money laundering.
The Los Angeles case is the result of a joint investigation by the Federal Bureau of Investigation and the Royal Canadian Mounted Police through a telemarketing fraud task force known as Project Emptor.