Astute retailer averts scam

Con artists target at least two city businesses

July 30, 2006
By JOSEPH M. DELEON News-Post Staff
jdeleon @ fredericknewspost . com

FREDERICK -- When the Rev. Charles Berkeley ordered more then $1,800 worth of furniture from Fabulous Finds in Downtown Frederick last month, owner Judy Russell was elated. She stood to make a commission of more than $700.

Then she found out he doesn't exist.

The fictitious reverend was part of an advance fee scam making the rounds in Frederick. While the scam is dressed in new technology, it uses the same boiler room techniques of the 1930s.

Edwin Lugo, the special agent in charge of the Baltimore field office of the U.S. Secret Service, said boiler room scams got their name from the cheapest room scam artists could rent, the boiler room.

"It's hot and cramped, so they were often vacant," he said. "They would run several phone lines down there and pass the phone around pretending to offer some service or product."

Such scams often use a sad story to gain the confidence of trusting people to score a fee for a product that does not exist, Mr. Lugo said.

For Ms. Russell, the scam artist claimed to be deaf and wanted to donate furniture to a charity in Ghana.

"These guys know how to work your emotions," she said. "I mean, who's going to question a deaf reverend?"

The man claiming to be the Rev. Berkeley called through a relay operator, a service that allows deaf, hard of hearing and speech impaired people to place calls to standard telephone users with a text telephone or personal computer.

Relay operators follow a code of confidentiality and ethics and will not participate in conversations for any reason. Operators pass on everything they hear, including background noises and voice intonations, according to the Maryland Relay Web site.

Calls to Maryland Relay were not returned.

Ms. Russell said she is accustomed to accepting relay calls. Many of her clients are deaf, possibly because her store is near the Maryland School for the Deaf, she said.

The scam unfolds

The man claiming to be the Rev. Berkeley wanted to buy glass-top dining room tables. Ms. Russell had three, but he declined to see pictures.

"That he called on relay wasn't unusual, but what was unusual was that he wanted to buy the furniture sight unseen," she said.

She asked the man to contact her by e-mail because conversations on relay can take a long time, especially while working out the terms of a sale.

The three tables cost $1,800 and shipping to Ghana costs about $1,200.

The man told Ms. Russell rules in Africa require the merchant to pay for shipping. He asked Ms. Russell to split the purchase between two credit cards he provided, and to wire the shipping cost to a freight company in Ghana.

While it was hard to turn down the sale, she contacted the credit card company on a hunch. She wasn't surprised to find out the cards were stolen.

"Too many things didn't add up, like that he would be willing to pay almost as much for shipping as the cost of the original sale," Ms. Russell said. "Your first instinct is that you want to play detective and you want to catch those crooks."

The scammer never actually wanted the merchandise, instead hoping to simply take Ms. Russell's $1,200.

Ms. Russell contacted Kara Norman, executive director of the Downtown Frederick Partnership, to warn other merchants of the scam. The partnership promotes traditional main streets and neighborhoods in Frederick with events and marketing.

Ms. Norman sent an e-mail bulletin to warn downtown merchants about the scam.

"Communication with merchants is really valuable in the sense that they can be aware of suspicious activities," she said. "Small business owners can't afford to take these kinds of losses."

When Anne Goodwin, owner of Flights of Fancy, read Ms. Norman's e-mail, she didn't expect she would also be a target. The store carries ornaments and toys, including toy-quality kazoos, tambourines, harps and xylophones.

About a week later, a relay caller asked about shipping musical instruments for 9- to 15-year-olds to Nigeria.

Store manager Ann Kurz accepts relay calls about once every two months, and she's used to shipping merchandise to customers, but has never shipped anything overseas.

The series of relay calls, which spanned three hours, focused on the cost of shipping.

"We had no way of guessing that cost; we'd have to box it and weigh it," Ms. Goodwin said. "But his persistence about shipping kind of triggered my memory about Kara's e-mail."

The caller finally lost interest when Ms. Kurz did not commit to a price to ship the merchandise.

"My biggest concern was that it was done on a (relay) call," Ms. Kurz said. "I don't want to have concerns about taking those calls in the future."

Scams abound

After notifying Ms. Norman about the scam, Ms. Russell contacted the Frederick Police Department. The police refused to take a report because she did not fall victim to the scam. She then decided to contact the FBI, which told her to contact the U.S. Secret Service.

"It made me feel like I had to fight just to get heard," she said. "And I wasn't encouraged to think they would actually catch them."

The U.S. Secret Service was created in 1865 to stop counterfeit money. Fraud investigation and presidential protection duties followed in 1867 and 1901, respectively.

Mr. Lugo is familiar with the pay in advance scam. By noon June 27, Ms. Russell was the fourth person to report an attempted dupe. Mr. Lugo declined to comment on how prevalent the scams are in Frederick County.

"These guys are professionals at social engineering," he said. "Criminals are learning to become more astute at using technology to gain their target's confidence."

Rushing potential victims to make a decision often gives scammers an edge. Con artists also use an emotional story line or appeal to the target's greed to further ensnare them, Mr. Lugo said.

One scam targets graphic artists -- designers answer a classified ad and are lured into creating a greeting card.

The con artist sends the designer a box, with instructions to not to open the package. The designer is told to repackage the box to match the card design and mail it to an address oversees.

The boxes often contain electronics purchased with stolen credit cards. The designer never gets paid and may become a person of interest in the investigation of stolen property.

Another scam centers on a fictitious lottery in another state or country. Scam artists mail a fraudulent check for several thousand dollars to cover the expenses associated with claiming a winning ticket.

The victim deposits the check, and then transfers the funds electronically to another bank account. The lottery money never appears and victims have to cover the transferred funds from their own money.

"You really need to ask yourself if these things make sense," Mr. Lugo said. "How are you going to win a lottery you don't remember entering? The problem is, people really want it to be true."

As much as Ms. Russell wanted the sale of those three tables to be true, she trusted her gut.

"If people are suspicious of something they are asked to do, act on that," Ms. Russell said. "If something doesn't seem right, trust your instincts."