The scheme itself was simple. Callers, hired by Alfred Greene, Jr., and Richard Leonard, used phone lines set up in a suite of small offices in the Houston area to contact elderly citizens located across the country and inform them that their names had been selected by a committee to receive one of four awards. These individuals, whose identities had been purchased from a mail order company, were read to from a pre-designed script and told that they had already been chosen to receive either first prize of $15,000.00 cash; second prize consisting of a diamond and sapphire pendant; third prize which was a large-screen Sony television; or, fourth prize consisting of $1,000.00 cash. The pendant, the only prize ever given out, was designated as second prize so that the victim would think it the second-most valuable item after the $15,000.00. In fact, a portion of the script anticipated questions as to the value of the pendant and was designed to mislead the person to believe that the jewelry, later appraised for $15.00, was worth between $2,000.00 and $2,500.00. To obtain the prize, the victim was informed that he or she had to pay $395.50. This money, the listeners were told, was for “promotional fees,” “shipping and handling,” “registration and processing,” and “buying soap.” To reduce the chances of the victim’s changing his or her mind, or a family member’s coming home and extinguishing the deal, Federal Express was dispatched to pick up the $395.50 check shortly after the phone call.
In fact, there was no contest, there was no drawing, there was no committee, and the victims had not sent in entry cards to which the script referred. The scheme also included a follow-up letter to the victim referring to the phone call and repeating the “good news” that a prize had been won. This letter was designed to lull the victim into a sense of satisfaction with the contest. Later, a box of cheap cosmetics was delivered to the victim for the same purpose. No one ever received anything other than a $15.00 pendant. In effect, the victims each bought a $15.00 pendant for almost $400.00. By the time the FBI executed a search warrant at the office of Promotional Advertising Concepts, the business name of the operation, the scheme had reeled in 497 victims and grossed close to $200,000.00.
Alfred Greene, owner and operator of the business, and Richard Leonard, manager of the phone room, both entered pleas of guilty to wire and mail fraud, conspiracy, and using a false name to further a scheme to defraud. They waived their right to jury trial and contested the money laundering counts at a bench trial. Alfred Greene, Jr., was convicted on several counts whereas Richard Leonard was found not guilty on the sole money laundering offense with which he was charged. Employees of the operation, Rhonda Kelley and Veronica McCracken, contested all the fraud and money laundering offenses with which they were charged and, therefore, obtained a severance from Alfred Greene, Jr., and Richard Leonard and were tried before a jury. They were both convicted of conspiracy as well as wire and mail fraud. In this consolidated appeal, the United States Court of Appeals, Fifth Circuit, rejected challenges to the convictions and sentencing of four operators and employees of a Houston-based telemarketing scam. Finding no error, the United States Court of Appeals, Fifth Circuit, affirmed the convictions and sentencing decisions in every aspect.
The facts summarized above are excerpted from what was written by the United States Court of Appeals, Fifth Circuit. More information is available from the source documents: Nos. 93-2768, 93-2769 and 93-2778, United States Court of Appeals, Fifth Circuit, August 14, 1995, opinion of Edith H. Jones with King and Kazen concurring.