Four arrested at LV telemarketing ‘boiler room’

Brian Seals

Friday, Aug. 14, 1998 | 11:45 a.m.

State investigators and federal agents descended on a Las Vegas telemarketing operation Thursday, arresting four people in what prosecutors called a scheme to deprive elderly people of their money.

Two other people are being sought on the same charges -- telemarketing without registration --- and another was arrested on a charge of marijuana possession during the raid.

Officials say Century Pacific Group Inc., 6985 W. Sahara Ave., was a "boiler room" operation that targeted out-of-state elderly customers, telling them they had won prizes but that they had to send money to cover various expenses.

For example, a 77-year-old Watertown, N.Y., woman was told she had won a trip and was asked to send $499 for legal fees. She sent the money, but never got her trip, according to state authorities.

Six similar cases were cited in the complaint, but Deputy Attorney General Matt Gabe said more may come forward.

Arrested Thursday were: James Edward Smith, 26; Jeffrey S. Klingenberg, 27; Randolph T. Gregg, 58; and Darin Notaro, also known as Darin Sasser, 24.

They were taken to the Clark County Detention Center and held on $50,000 bail per count.

Authorities searched for two more suspects: Brian F. Crawford, 45, and Thomas P. O'Donnell, 36.

Smith, the alleged president of the company, Klingenberg, Gregg and Crawford are also charged with obtaining money under false pretenses against a person older than 65. O'Donnell is charged with obtaining money under false pretenses. Smith was also charged with failing to provide workers' compensation insurance.

Obtaining money under false pretenses carries a possible sentence of one to six years and a $10,000 fine. The sentence is enhanced when the victims are older than 65, with punishment of two to 12 years and a possible $20,000 fine. Unregistered telemarketing carries a possible sentence of one to four years and a $50,000 fine.

One of the men, when asked what kind of operation he was involved in, said "a legal one" as he was placed in an agent's car.

Theodore Manos, attorney for James Smith, said Century Pacific had contacted the Nevada consumer protection agency and was advised it need not register with the state.

"I feel they violated no law," Manos said, explaining the company was selling a package of information on how to enter sweepstakes and was not telling people they had won prizes.

But Gabe said the company used what is called a "mooch" list of customers who are prone to enter sweepstakes and contests.

"The sad thing is, they are usually elderly," Gabe said.

Such operations often target consumers in other states because there is less chance of getting caught than if they targeted customers in state.

Attorney General Frankie Sue Del Papa said Nevada has had its share of telemarketing scams, but that progress is being made to curb such activity. The difficulty is that firms often close in one state and move to another.

"I compare it to an amoeba," she said. "You push in one area, and they push out in another."

Nationwide, Nevada joined a crackdown with 28 other states last month in targeting telemarketing operations that sell securities. For example, the Secretary of State's office revoked the license of New York-based Duke & Co. July 16 after the firm was accused of high-pressure sales tactics and was expelled from the National Association of Securities Dealers.