Eight arrested in alleged telemarketing scam

Friday, July 2, 1999 | 3:07 a.m.

CARSON CITY -- Eight people were arrested Friday by the state attorney general's office on charges of bilking thousands of Las Vegas residents in a telemarketing scam reportedly to raise money for a military veterans group.

Deputy Attorney General Brian Kunzi said the arrests capped a two-month investigation in which donations were solicited on behalf of an organization called Veteran's Opportunity and Service Center, based in Reno.

The telemarketers raised about $12,000 a month but Kunzi said the investigation is continuing into other possible telephone schemes by the same people.

Frank DeCarlo, identified as the leader of the group, was charged with money laundering, deceptive trade practices, obtaining money under false pretenses and being an unregistered telemarketer. The other seven, charged with the latter three offenses, were Lawrence Davis, Dean Prange, Marcella Henderson, Phillip Dow, Lyndon Opacible, Carolyn Hinojosa and Michael Bray.

The telemarketers had an agreement with Veteran's Opportunity and Service Center, which is headed by James Martin of Reno, to raise funds for the organization. But the telemarketers would keep 90 percent and give 10 percent to Martin.

Kunzi said the telemarketers would tell the victims that all the money was going to the veterans group. Several businesses in the Las Vegas area contributed several hundred dollars. And those solicited over the telephone were told that for a $50 donation, they would receive a basket filled with lotions and other merchandize.

But the baskets never arrived.

As soon as somebody agreed to donate, a runner was sent to the victim's home to pick up the check. The telemarketers told their customers the money was tax deductible and this was a tax-exempt organization. "There were a lot of misrepresentations," Kunzi said.

Investigators from the attorney general's office raided the Las Vegas offices at 800 E. Sahara Ave., Suite 104, early Friday. And the arrests were made later in the day.

The attorney general's office was assisted in the investigation by representatives from the American Legion and the Veterans of Foreign Wars. But these two groups do not have any connection or affiliation with the Veteran's Opportunity and Service Center.

Kunzi said Martin, the owner of Veteran's Opportunity, was cooperating with authorities.

He said it is not unlawful for a deal to be made for the telemarketers to keep 90 percent and give only 10 percent to the charity. But he said these telemarketers misrepresented that all of the money was going to a veterans group.

Kunzi said the DeCarlo group would give Martin his 10 percent every month and pay the office and telephone bills. But then the bank account would be drained.

Attorney General Frankie Sue Del Papa said, "Charity fund-raising is becoming big business. Unfortunately, as more charities rely on professional telemarketers for fundraising, a fertile environment for fraud is sometimes created.

"These types of telemarketers are not bashful about saying whatever it takes to get a donation. The claims are often totally false or at least misleading," she said.