Man Convicted of Illegal Telemarketing Says State Profits from Crime

Thursday, March 7, 1996 | 11:59 a.m.

Edward Bruce Gould Jr., of Las Vegas, said agencies such as Nevada's Consumer Affairs Division receive registration fees from telemarketers, and in turn grant "a license to steal." He compared the relationship between state agencies and telemarketers to a partnership.

Gould, who was convicted on charges relating to deceptive phone sales, made the allegations at a hearing before the Senate Special Committee on Aging in Washington, D.C.

Gould, 30, pleaded guilty last year to a 51-count indictment for racketeering, wire fraud and money laundering. He is scheduled to be sentenced March 29.

Margaret Stanish, senior deputy attorney general who prosecutes telemarketing cases, called Gould's allegations "totally ridiculous."

"This is a typical rationalization by a fraudulent telemarketer for his conduct," Stanish said from her Las Vegas office."Just because a person registers his car with the state of Nevada doesn't mean the state sanctions driving under the influence."

Patricia Morse Jarman, commissioner of the Consumer Affairs Division, said telemarketers are required to post bonds of at least $50,000 and pay registration fees of $6,000 per business owner.

"The bond gives victims a recourse for the money they've lost, and the registration fee allows us to keep track of the telemarketers," Jarman said. "By no means are we approving or disapproving of telemarketing. We have some of the strictest laws in the country."

But Jarman acknowledged the only way the state knows if a telemarketing scam is occurring is through consumer complaints.

The Consumer Affairs Division, a branch of the Department of Business and Industry, enforced telemarketing laws until July 1993 when the attorney general's office took over. The shift stemmed from Nevada's growing problem with telemarketing fraud and the state's desire to seek criminal prosecution instead of administrative fines.

Stanish said the registration fees finance her office, which includes four attorneys, three peace officers and a paralegal.

"Complaints have dropped substantially since 1993, but telemarketing is like any other crime - there are more criminals than agents," she said.

Kathryn Landreth, U.S. attorney for Nevada, told the Senate panel the state requires telemarketers to register to control fraud, which had given the state a black eye.

"Telemarketers have to submit the scripts they use, but they don't stick to them," Landreth said.

Landreth said her office prosecuted Gould after he told a Seattle woman he could recover $84,000 she had lost to other telemarketers if she paid him $28,251.

Gould told the committee he was a millionaire by age 27. He said he had victimized about 5,000 people and easily could recruit employees because there were plenty of people in Las Vegas willing to engage in scams.

Sen. Harry Reid, D-Nev., a member of the committee, supported legislation last year by Sen. Richard Bryan, D-Nev., allowing the Federal Trade Commission to impose stiff penalties on telemarketers who deceive or harass.

But Sen. David Pryor, D-Ark., voice frustration with state and federal attempts to crack down on telemarketing fraud.

"Every time we plug up a loophole, these scambags find a way around it," Pryor said.