LAWFUEL – The Law Newswire – MICHAEL J. GARCIA, the United States At…

LAWFUEL – The Law Newswire – MICHAEL J. GARCIA, the United States Attorney for the Southern District of New York, and KEVIN A. DELLI-COLLI, the Acting Special Agent in Charge of the New York Office of the U.S. Department of Homeland Security’s Immigration and Customs
Enforcement (“ICE”), announced that STEPHEN CLARK, a Canadian
citizen, was sentenced today in Manhattan federal court to 135
months’ imprisonment for engaging in a massive telemarketing
fraud scheme that targeted tens of thousands of U.S. victims
between early 2002 and late 2003. CLARK’S co-defendant, RAYMOND
PAYNE, a former Vice President of HSBC Bank (“HSBC”) in
Manhattan, was also sentenced today to 70 months’ imprisonment
for his role in the scheme.

On September 1, 2006, CLARK pleaded guilty to one count
of conspiracy to commit wire and mail fraud and one count of
conspiracy to launder money. PAYNE pleaded guilty on August 18,
2006 to one count of conspiracy to commit wire and mail fraud.
According to a superseding indictment (the “Indictment”) against
CLARK, PAYNE, and co-defendant LESLIE PINSKY, earlier criminal
complaints in the case (the “Complaints”), and CLARK’s and
PAYNE’s statements in their guilty plea proceedings:
CLARK and PINSKY ran First Choice Tele-Services
Corporation (“First Choice”), a Montreal-based company that
employed telemarketers who made unsolicited or “cold-calls” to
low-income U.S. residents with poor credit. In these calls,
First Choice telemarketers offered U.S. residents “guaranteed”
credit cards for a fee that ranged from $249 to $299. First
Choice telemarketers working for CLARK and PINSKY also obtained
the victims’ bank account information, which First Choice in turn
used to initiate automatic transfers of funds from the victims’
bank accounts to an account First Choice held at HSBC in
Manhattan. Although some of the victims of the scheme did
receive a manual on how to repair their bad credit, none of the
victims received a credit card from First Choice. As CLARK
admitted in his guilty plea proceeding, First Choice cold callers
made fraudulent representations to victims of the scheme, and
First Choice never had any intention of providing credit cards to
anyone.

PAYNE, who worked out of HSBC’s corporate offices in
Manhattan, was the relationship manager (or account
representative) on First Choice’s HSBC account. By April 2003,
PAYNE became aware of the fraudulent nature of First Choice’s
business. Thereafter, he made a conscious decision to hide the
scheme from management at HSBC and continued to participate in
the scheme. PAYNE also furthered the fraud scheme by selling
credit manuals to First Choice, which then were mailed to victims
in lieu of promised credit cards.

The scheme victimized an estimated 100,000 victims in
the U.S. Approximately $30 million in fraudulent proceeds from
the scheme was run through First Choice’s HSBC account, and CLARK
and PINSKY also laundered proceeds of the fraud through accounts
in Canada in an effort to conceal the source of those funds.
United States District Judge THOMAS P. GRIESA, who
imposed the sentence, remanded CLARK. In addition to the prison
sentence, Judge GRIESA also ordered CLARK to serve a supervised
release term of 3 years, and to make restitution to the victims
of this scheme, the details of which Judge GRIESA deferred to
September 5, 2007 at 4:30 p.m. Judge GRIESA also ordered PAYNE
to serve a supervised release term of 2 years upon completion of
his sentence, and to make restitution to the victims of this
scheme, the details of which Judge GRIESA deferred to September
5, 2007 at 4:30 p.m.

CLARK, 48, resides in Dollards-Des-Ormeaux, Quebec.
PAYNE, 36, resides in Brooklyn, New York. PINSKY, meanwhile,
remains in Canada, where he is appealing an order that he
surrender to the U.S. pursuant to an extradition request.
The investigation into the telemarketing fraud scheme
was conducted in New York by the ICE El Dorado Task Force, and in
Canada by Project COLT (Center of Operations Linked to
Telemarketing). Project COLT is comprised of federal agents from
ICE, the Federal Bureau of Investigation and the U.S. Postal
Inspection Service, as well as investigators and law enforcement
personnel from the Royal Canadian Mounted Police, Surete de
Quebec (the Quebec Provincial Police), the Montreal Urban
Community Police and the Canadian Competition Bureau. Mr. GARCIA
praised the efforts of all of the agencies involved in the
investigation.

This case is being prosecuted by the Office’s Major
Crimes Unit. Assistant United States Attorneys JONATHAN S.
ABERNETHY and WILLIAM C. KOMAROFF are in charge of the
prosecution.

The charges against PINSKY are merely accusations and
the defendant is presumed innocent unless and until proven guilty.

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