Settlement in Cross-Border Fraud Scam

Two defendants who took part in an alleged multi-million dollar telemarketing fraud targeting seniors, a scam that included withdrawing money from their accounts without authorization, agreed Tuesday to settle Federal Trade Commission charges.

The settlement bans Marc Ferry and Robert Barczai from using remotely created checks drawn on consumers’ bank accounts, requires them to obtain consent before debiting consumers' accounts and prohibits them from misrepresenting any goods or services. Ferry and Barczai will turn over the proceeds of the scheme from their personal and corporate accounts. 

The FTC alleged that the defendants conduct violated the FTC Act and the FTC’s Telemarketing Sales Rule and that the operation drew in nearly $11 million between 2010 and March 2014. The FTC previously put that number at more than $20 million. 

The FTC filed for default judgments against the defendants and, in January, summary judgment against the leading individual defendant in the scheme, Ari Tietolman. The FTC wants to permanently bar Tietolman from the conduct alleged in the complaint and hold him liable for the $10.7 million in harm he caused defrauded consumers.   

Tietolman and his associates, according to a March 2014 complaint, built a network of U.S. and Canadian entities to carry out their operation. The defendants used a telemarketing boiler room in Canada, where Tietolman lives, to cold-call seniors claiming to sell fraud protection, legal protection, and pharmaceutical benefit services for $187 to $397.

In some cases, the telemarketers convinced consumers they were affiliated with banks or government entities, leading consumers to disclose their bank account information. The defendants then used that information to create checks drawn on the consumers’ bank accounts. They deposited these "remotely created checks" into corporate accounts set up by defendants Ferry and Barczai in the U.S. The defendants then transferred the money to accounts in Canada, the FTC alleged.

Tuesday's order against Ferry also imposes a judgment of $325,449 against him, which will be partially suspended after he pays the FTC $68,412.

The order against Barczai imposes a judgment of $9,655,638, which will be partially suspended after he pays the FTC $21,367.

"Scammers thought they could cover their tracks by operating across borders, but law enforcement caught up with them," said Jessica Rich, director of the Bureau of Consumer Protection. "We’ve shut down their scheme of lying to older people and stealing their money."