Opinion ID: 3011448
Heading Depth: 2
Heading Rank: 1

Heading: The Telemarketing Scam

Text: In December of 1990, Rita Holz, her husband Julius Schurkman, and a third person, Adie Lipton, set up All-Win Financial Corporation in Del Rey Beach, Florida. The company began operations in January of 1991. It then placed advertisements in newspapers across the nation advertising personal loans and debt consolidation. No advertisements, however, were placed locally. All-Win wished to avoid face-to-face confrontations with disgruntled clients. The advertisements offered loans of up to $10,000, even to those with acute credit problems, and included a toll-free telephone number. When a prospective applicant called the toll-free number, a telemarketer would solicit basic background information from the applicant, including name, social security number, and any credit problems. The telemarketer would then ask the applicant to call back in approximately one hour so the loan could be processed. When the applicant called back, the telemarketer would congratulate the applicant and tell him that he had qualified for the loan. Of course, no processing occurred during that interval, and the time lapse between calls was merely pretextual. After approving the applicant on the telephone, the telemarketer would then give the applicant an express mail or Federal Express number and tell the applicant to use the number to send All-Win its $199 application fee. Once AllWin received the fee, it forwarded the applicant's name, 2 along with a $25 fee, to North American Acceptance Exchange (NAAE). NAAE was not a real lender, but was a denial mill. NAAE helped create the illusion that the loan process was legitimate by sending loan application papers to the applicants. The loan application was sent to the applicants to string them along and add to the illusion of legitimacy. Upon completing the application and mailing it to NAAE, or another denial mill used by All-Win, the applicant would ultimately receive a rejection letter. In June of 1991, All-Win experienced legal problems and decided to relocate to Cherry Hill, New Jersey. Holz undertook the majority of the relocation effort. She rented space, obtained phone lines, and set up a new company under the name A-1. By July of 1991, the telemarketing scam was up and running again and continued to utilize the same procedures as All-Win, except that the application fee increased to $249. A-1 remained in business until November of 1991. By that time, A-1 and All-Win had defrauded their clients of approximately $1.2 million.