Canadian citizen pleads guilty in connection with Costa Rica-based biz-opp fraud

April 15^th, 2013 (InsideCostaRica.com) Kerry Michael Deevy pleaded guilty in U.S. District Court for the Southern District of Florida in Miami to 13 counts of an indictment pending against him, including one count of conspiracy to commit mail and wire fraud, three counts of mail fraud, and nine counts of wire fraud, the Justice Department and the U.S. Postal Inspection Service announced last Thursday.

Deevy, a Canadian citizen, was charged in connection with the operation of a series of fraudulent business opportunities.   Deevy was arrested in Costa Rica in February 2012 following his indictment by a federal grand jury in Miami on Nov. 29, 2011.   Following his arrest in Costa Rica, Deevy was extradited to the United States for prosecution.   Deevy was arrested based on charges that he and his co-conspirators purported to sell vending machine and greeting card business opportunities, including assistance in establishing, maintaining and operating such businesses.   The indictment is part of the government’s continued nationwide crackdown on business opportunity fraud.

In addition to Deevy, 11 other individuals have been charged in connection with the Costa Rica-based scheme.

“The Department of Justice is committed to cracking down on financial fraud, including international telemarketing schemes,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division.  “That is why we will continue to prosecute those who would deprive innocent, hardworking Americans of their hard-earned money by offering phony business opportunities.”

Beginning in 2006, Deevy and his coconspirators fraudulently induced purchasers in the United States to buy business opportunities in Cards-R-Us Inc., Premier Cards Inc. and Nation West Distribution Company.   The business opportunities cost thousands of dollars each, and most purchasers paid at least $10,000.

The companies made numerous false statements to potential purchasers of the business opportunities, including that purchasers would likely earn substantial profits; that prior purchasers of the business opportunities were earning substantial profits; that purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards; and that the business opportunity worked with locators familiar with the potential purchaser’s area who would secure or had already secured high-traffic locations for the potential purchaser’s merchandise stands.

The companies, operating from Costa Rica but posing as though they were in the United States, employed various types of sales representatives, including fronters, closers and references.   A fronter spoke to potential purchasers when the prospective purchasers initially contacted the company in response to an advertisement.   A closer subsequently spoke to potential purchasers to finalize deals.   References spoke to potential purchasers about the financial success they purportedly had experienced since purchasing one of the business opportunities.   The companies also employed locators, who were typically characterized by the sales representatives as third parties who worked with the companies to find high-traffic locations for the prospective purchaser’s merchandise display racks.

Deevy, using aliases, was a fronter and reference for Cards-R-Us, Premier Cards and Nation West.

“Fraudsters must realize that financial fraud victimizing Americans will be prosecuted vigorously, even if the schemers conduct their fraudulent operations from abroad,” said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida.  “Increased international law enforcement cooperation eliminates safe havens for those who cheat American citizens from overseas.”

“ The success of this investigation shows that the U.S. Postal Inspection Service continues to work closely with the Department of Justice and our law enforcement partners, both foreign and domestically, to protect the American consumer from the predatory nature of business opportunity and telemarketing schemes ,” said Tony Gomez, Acting U.S. Postal Inspector in Charge in Miami.