Seventh Circuit hears oral arguments on advance fee fraud appeal

[JURIST] The US Court of Appeals for the Seventh Circuit [official website] Thursday heard oral arguments [MP3 audio] in a case [filing record] brought against four employees of fraudulent job placement companies ISCS and Receiver [fraud victim backgrounder]. The Chicago-based companies had operated by charging applicants who sought to be placed through the company a $450 advance fee, but never actually providing them with jobs [advocacy report]. The defendants in the case were four lower-level employees of the companies who either operated phones, conducted interviews, or sent emails to job applicants who the companies sought to defraud. Attorneys for the defendants, who had each received approximately two years in prison for their participation in the scheme, argued that the convictions were improper because the reliance on hearsay and opinion evidence imputed knowledge of the scheme to their clients. The judges expressed doubt over the argument, but also lamented the fact that some of the organizers of the scheme had received reduced sentences because of their cooperation with the government.

The scam run by the companies is called an advance fee fraud [advocacy website], and strong measures to combat it have become increasingly common. In May 2006, the US Justice Department [official website] and Federal Trade Commission [official website] announced [JURIST report] that authorities in five countries have arrested 565 people as part of Operation Global Con [DOJ fact sheet]. Officials said the suspects received more than $1 billion from some 2.8 million Americans who thought they were paying to get credit cards, claim sweepstakes winnings, make investments or avoid paying taxes. In April 2006 Internet Crime Complaint Center [official website] issued the 2005 Internet Crime Report [PDF text; JURIST report] in which it said that Americans had reported a record $183 million lost to Internet fraud in 2005.



 

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