The RCMP, along with police forces in Quebec and members of the Canadian Border Services Agency, arrested more than 130 people Tuesday in and around Montreal after a major fraud bust.
Police raided five locations -- including a warehouse and two residences -- that were allegedly part of a telemarketing scheme that operated in Canada, the U.S., and Europe.
Police say the business sold first aid and computer supplies, but at inflated prices and in a fraudulent manner. The company primarily targeted small and medium sized businesses in what an RCMP media release describes as a "mass marketing fraud" with 1,500 victims.
But the RCMP says they went after the business not just because of the prices they charged for their products, but because of the way they sold the products. The Mounties said the tactics of telemarketers amounted to fraud.
The company, which has not yet been named because of the on-going investigation, allegedly operated three types of schemes:
- In one scheme, company representatives allegedly called businesses pretending to be government health officials. They told the person on the line that their business was required to have the first aid kit by law. They would then sell the kit at a price that was as much as 10 times its value.
- In another scheme, police said the company would tell businesses they would be listed in a directory, but failed to actually provide the service after collecting payment.
- And in a third scheme, the company allegedly sold office products at exorbitant prices. When clients tried to return the products, they were told the deadline for returns had passed and they would be sued if they didn't pay up.
"Let's focus on the way that telemarketers are dealing to sell that first aid kit," RCMP Cpl. Elaine Lavergne told reporters in a media conference broadcast live on Â鶹´«Ã½net Tuesday.
"It was so much pressure on the clients, to even threaten them, to force them to answer quickly that it was fraud. It was a fraudulent way to sell things. "
Lavergne noted that selling products at high prices alone isn't a crime. She used the example of the sale on EBay of a musical instrument such a trombone. If someone wants to sell the instrument for a set amount and there's a buyer for it at that price, there is no crime.
"But if I'm telling you that that trombone will transform itself into a princess and drive a jaguar, it becomes a fraud because that's not what this product is. And pressuring the client on top of it, that's where it is becoming a problem. "
The Mounties said they first began receiving complaints about the company in 2004. But they said their investigation became move intensive in the last few months as they collected evidence.
