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aTwenty people,
including five county residents, have been indicted in San Diego federal court, accused of operating a ring that pitched fraudulent
Internet and infomercial investments.
About 3,000 people fell prey to the telemarketing scam that operated out of San
Diego and dozens of other cities across the country, federal authorities said in unsealing the indictment yesterday.
The San
Diego case was part of a nationwide crackdown on Internet fraud announced by the FBI and the Justice Department.
In all,
90 people and companies in more than 20 states have been charged with running Internet scams that ranged from online auctions
to merchandise and credit card fraud.
Federal authorities said 60 separate investigations were part of a recent effort
to crack down on Internet crimes. About 58,000 victims were scammed out of more than $117 million, the FBI said.
In the
San Diego case, victims were pressured by telemarketers working out of Los Angeles, San Diego, Las Vegas and Tampa, Fla.,
to invest in Internet ventures. What they weren't told was that 85 percent of their investments were being pocketed by the
telemarketers, said Assistant U.S. Attorney Steven Peak.
"This kind of system is replete with false statements and misleading
facts designed to get investors to send in thousands of dollars," Peak said. "It takes a lot of persuasion, and very often
the people on the phone don't know what they are talking about, so they make it up as they go along."
The five
San Diego County defendants are accused of operating a boiler room out of a suite in a La Jolla office building. Kent Bollenbach,
48, and Eugene Evangelist Jr., 48, are accused of running the office, but authorities haven't been able to locate them.
Anthony
Castriotta, 53, and Daniel Sanders, 54, of Carlsbad and Richard York, 51, of Oceanside pleaded innocent this week to federal
conspiracy charges.
Peak said the telemarketers persuaded victims to invest in 900-number infomercials,
including a dating service. The dating service infomercial featured an appearance by TV game show host Bob Eubanks. Peak said
the production company that hired Eubanks had no idea it was helping to promote a scam.
Investors were told their money would
be used to pay for developing the various companies. However, the companies were never set up, Peak said.
Telemarketers
also persuaded victims to invest in virtual shopping malls that didn't exist. Partially constructed Internet sites were set
up to fool the investors.
When the victims started complaining, they were told the companies would be publicly
traded. But the stock that telemarketers gave the investors was in shell companies with no value, authorities said.
Dozens
of sales offices or boiler rooms were operating throughout California, Florida and Nevada between 1994 and 1997, Peak said.
The other defendants in the case have either been arrested in other cities or are expected to surrender to authorities
soon.
Castriotta's defense attorney, Lynn Ball, said his client merely worked as a telemarketer in the La Jolla office
for less than a year almost five years ago; as soon as his client heard the company was being investigated, he quit.
In 1998,
Castriotta received a letter from prosecutors informing him that he was a target. He didn't hear anything more until his arrest
this week, Ball said.
Castriotta is now working as a dispatcher for a limousine service.
"He's small
fry," Ball said.
Peak said the indictment is partly the result of information
provided by others who have already pleaded guilty in the case. Over the past three years, 19 people have pleaded guilty to
participating in the scam.
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