Local men charged with telemarketing fraud
Published on December 24th, 1997
BOSTON, MA - A federal grand jury returned an indictment last week charging seven people with conspiracy, mail fraud, and wire fraud in connection with a fraudulent telemarketing operation located in Woburn and Stoneham. The indictment also charges the leader of the alleged scheme, Stephen L. Salvatore, with 25 counts of money laundering. United States Attorney Donald K. Stern, and U.S. Postal Inspector In Charge Michael Ahern, announced that an indictment re turned last week charges seven individuals with participating in the fraudulent telemarketing scheme: Stephen L. Salvatore, 50, of Stoneham, Alfred T. Salvatore, 54, of Stoneham, Garrick R. Caldandro, 45, of Lynn, Joel C. Salvatore, 28, the son of Stephen Salvatore, of Salem, New Hampshire, David M. Capachiette, 25, of Melrose, Robin L. Shuman, 32, of Norwood, and Thomas R. Sexton, 26, of Quincy. The indictment returned last week alleges that, between 1993 and 1996, the defendants sold vending machines through a fraudulent telemarketing operation located in Woburn and later in Stoneham and operating under several corporate names. Under the scheme, the defendants and others made telemarketing calls in which they persuaded prospects to invest thousands of dollars in vending machines, based on a sales pitch that touted the machines as money making business opportunities.
According to the indictment, the key to the defendants' sales routine was the use of phony customer "references," The managers or "closers" of the operation — including Calandro, Joel Salvatore Capachiette, and Shuman — would give prospects the names and telephone numbers of people who supposedly were satisfied customers of the companies. In fact, these references were phony - the people whose phone numbers were given out to customers, including the defendant Sexton, were friends or family members of the participants, using assumed names, who had no machines and had been paid to lie about their ownership of machines. In many instances, the employees themselves, using their home telephone numbers and phony names, posed falsely as the satisfied customers. The references would claim falsely, that they had purchased machines form the defendants' companies, were making money, and that it was a good investment opportunity. The indictment alleges that Alfred Salvatore handled the finances of the operation; All of the other defendants are charged with using aliases in participating in the scheme. The indictment alleges that in addition to giving out the phony references, the "closers"in the scheme made a variety of misrepresentations, including promises of warranties, exclusive territories, and, in some instances, misrepresenting that the plastic machines were constructed of metal. In addition, Stephen Salvatore,who is charged with organizing the scheme, is alleged to have routinely lied to customers t make excuses for the companies' failure to live up to their commitments. The indictment alleges that hundreds of investors were induced by the defendants' deceptive sales routine to in vest thousands of dollars apiece on the machines. Although the defendants generally did ship machines to customers, the indictment alleges that the machines were of poor quality, malfunctioned, and broke. The defendants then refused to stand behind the products or return customers' money. As a result, according to the indictment, there were few if any satisfied customers, and the defendants received a large volume of customer complaints. In addition to the conspiracy, wire fraud, and mail fraud charges against 411 defendants, the indictment charges Stephen Salvatore with 25 counts of laundering. He is charged with using his step daughter's bank account to deposit and withdraw tens of thousands of dollars in proceeds of the fraud, to conceal his ownership and the location of the funds. U.S. Attorney Stern commented: "These defendants are charged with using a thoroughly deceptive telemarketing pitch, complete with bogus customer references, to induce consumers to invest thousands of their hard-earned dollars. In an age where a great deal of commerce takes place through the mails and over the telephone, people have the right to expect that a sales pitch is not deliberately deceptive. We will vigorously prosecute anyone who breaches that public trust. U.S Postal Inspector In Charge Ahern stated," This is an example of our ongoing efforts in combating telemarketing fraud, especially those that victimize a wide range of groups including the elderly."
If convicted, each defendant faces a maximum of five years in prison and a fine of up to $250,000 on each count of conspiracy and fraud. In addition, Stephen Salvatore faces a maximum of 20 years in prison and a $500,000 fine on each count of money laundering.
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