I apologize for missing this story. It actually broke over a year ago. Inspectors raid telemarketing company Bankcard Empire, arrest 1.
The article from azcentral.com reported some of the facts correctly - Bankcard Empire raided and Leslie Mersky was arrested. Here's what was accurate:
Postal inspectors, assisted by the Tempe Police Department and the Arizona Attorney General's Office, served search-and-seizure warrants on the offices of Bankcard Empire and its affiliates.What the article failed to do was accurately explain how the people were scammed. I know, because I fell for this one.
Patricia Armstrong, a spokeswoman for the U.S. Postal Service in Phoenix, said the agents confiscated two truckloads of records and computer equipment and made one arrest.
Leslie Mersky, the father of Bankcard Empire's president David Mersky, was arrested on charges of forgery and fraudulent schemes and artifices.
In 2001, Leslie Mersky was sentenced to 42 months in prison for his role in a massive money-laundering scheme.
The article on azcentral.com stated that people were duped out of $10,000 to $20,000 for an opportunity to make money "with little or no work." Comments on the post consistently bashed the people as fools and that they were not very desperate if they can fork over $10,000. That's not how it went down.
Somehow Bankcard Empire got my cell phone number over two years ago. At the time, I was in need of making some money. Their rep called and explained an opportunity to me. The opportunity was finding leads on businesses that would like to save money on their credit card processing fees.
You know those bank terminals that they swipe your credit card with - that is what Bankcard Empire was supposedly selling.
I had been looking into a job selling credit card terminals, aka merchant processing services, a few years prior. I was familiar with what the Bankcard Empire rep was talking about.
How the scam works is they have an "opener" that does some qualifying - do you have computer access, do you have some time each week to devote to an opportunity, do you have an active credit or debit card where you could put a couple hundred dollars on if you like what we tell you?
If you're "qualified", they play an audio recording that briefly explains the opportunity. It focuses on the demand for the product and the "incredible income potential."
After the recording, a "closer" comes on the line to answer questions. I was on the phone with this guy for about an hour. I asked a lot of questions. I wanted to make sure it wasn't a scam.
His close was that I needed to buck up $495 for a "Licensing Fee" for me to work with the credit card processing terminals. The original price was $895, but they were running a special.
In reality, the fee could be whatever the rep decided. If he could only get $150 out of me, that was a start. In addition to the phony licensing fee, there was a monthly hosting fee of $19.95 that would be charged to my credit card for the hosting and maintenance of the website they gave me.
It all sounded like something I could do - generate leads for the company. Supposedly, you would input your leads into your website and Bankcard Empire would have a rep go out and close the prospect. I was told, "We have a 95% closing ratio because our rates are so good." If a deal closed, I was supposed to get $200 up front, then a percentage of all of the credit card transactions processed by that business as long as they stayed in business.
I was also told that I would receive a complete "Training Package" in about four or five business days. And I was going to be assigned a lifetime coach, who would help me market and build my business.
At first, I was excited that I found a way to make extra money. I didn't think I was going to have to do "no work" for what I was going to get in return. I mentioned my new business opportunity to a friend of mine and he said, "I'm pretty sure that's a scam." (To this day, I think HE's the one that gave them my cell phone number.)
After talking with my friend, I called my credit card company and explained that I believe I was scammed and I wanted the charges reversed. The person at the credit card company said, "We'll take care of it." A month later, there was no credit on my card.
I called the credit card company again and they had no record of me calling the first time. In addition, they said I needed to report this to their fraud department. So I was transferred. The agent in the fraud department told me that a claim form would be sent to me and I needed to complete the form and return it.
A day or two later after I first signed up with Bankcard Empire, my "Training Package" arrived. It was a fancy glossy folder with a few interior pages of useless information. A DVD was inside. I watched the DVD. It was a tour of the offices. I saw everything but the restrooms. But there wasn't one shred of useful content on the video that would help me build my business.
The next day, my "coach" called me. I told him I wasn't going to pursue the business and to get me off the list. I thought it would end there. Boy, was I wrong.
I filed my complaint with the fraud department of my credit card company. I stated that the $495 I was told was a licensing fee was shown on my receipt as Training Kit. I also told them that I didn't believe the company was legitimate.
A few weeks later, I received a letter from my credit card company that said the charges would be reversed until Bankcard Empire was given a chance to respond.
About a month later, I received a packet from my credit card company stating that my claim was being denied because Bankcard Empire had delivered what was promised. Copies of a signed shipping certificate (which I did not sign and the signature was not mine) were included with the letter. It also said that Bankcard Empire had delivered the goods to me that I requested. I thought I was getting training materials, not a freakin' tour of their operation.
So the charges were put back on my credit card.
The only way I could fight back was to go to the Internet and start looking for anything I could find on Bankcard Empire. I found a lot, and none of it was good. So I started adding my complaint to chat boards and blogs.
Almost immediately, replies came to my posts. They were from people that didn't use a name but said they were Bankcard Empire employees. The responses were vicious personal attacks against me, calling me a quitter and saying that I was too lazy or too stupid to work the opportunity. A lot of what was posted, I couldn't print here.
I started a blog called the Scam Reporter. I wrote extensively about Bankcard Empire, but I didn't accuse them of a crime. I just asked a lot of questions.
Shortly after my blog went up, a man emailed me from Maryland. He was a retired Naval officer. He, too, had been scammed by Bankcard Empire, but he managed to get his money back. What he did, though, was go on a mission to take Bankcard Empire down.
He contacted victims all over the country. He even found a guy that currently worked for Bankcard Empire and was feeding us up to the minute information from inside the demon.
Our mole had disclosed that the Bankcard Empire phone room was huge. Telemarketers were hounded to keep making calls all day long. Their reward was a cut of the "Licensing Fee" they were pitching. The mole said most of those people were lucky to be making commissions that were equal to minimum wage. The big money was made by the guys in the back room.
You see, the initial $100, $200 or $500 was just the starting point. Then your personal coach would step in. The coach's job was to "make sure you were being successful." Most people had little or nothing going when they first started and the coach had marketing strategies to help correct that.
Then, the coach would try to sell them an "email blast" or a "phone blast". Prices for these "blasts" ranged from $2,000 to $20,000. Money is all they were after.
With a legitimate company doing an email blast, you would receive the email list, the number of emails sent, the number of favorable responses, the number asked to be removed from the list and other standard marketing data. With Bankcard Empire, you got none of that. You had no idea how many emails were sent or to whom. They'd take your money and then tell you that the email blast didn't work, "As some marketing strategies don't. There are no guarantees." The business owner would be talked into another marketing strategy. This is where the numbers really inflate for the victims.
A lot of the victims were elderly people on fixed income. They were getting taken for $10,000 and $20,000 over a series of marketing efforts.
One of the tricks that Bankcard Empire used was to have their coaches and marketing reps identify themselves as being from some other company - so Bankcard Empire was always completely blameless.
After one of my question-laden posts on my scam site about Bankcard Empire, I got a really nasty email from a guy that identified himself as their Director of Multi-Media Marketing. Talk about vicious. Not something you'd expect from ANY company, especially one of their executives.
Then one day, I get a call from this "Director". He had figured out that I was actually one of their "customers" or "business opportunity owners." He had me on the speaker phone and I knew he was taping the phone call. Bankcard Empire had been identifying people that were complaining about them on the web and actually filed suit against about twenty of them, including my buddy in Maryland.
My conversation with the "Director" was rather passive. I let him ask all the questions, for which I replied with questions.
"Can you give me the name of ONE business that is currently using a Bankcard Empire credit card processing terminal?"
"That's privileged information. We don't disclose our clients."
"Well then, can you give me the name of ONE of your successful business owners, so I could learn how to do this business?"
"We like to keep our business owners privacy protected."
"I know of a guy that submitted over 90 leads through his website for you guys to close. He didn't get ONE customer. How do you explain that?"
"You know from being in sales that not every deal closes."
"Yes, but your guy told me that you have a 95% closing ratio."
"Those are independent contractors that do our telemarketing for us. Some of them lie. We can't control that."
"Sure you can. Hire a reputable telemarketing firm. Have you ever heard of Quality Control? A lot of legitimate companies use it."
"Are you saying that we're not legitimate?"
"I'm saying, I don't know what you are. You don't seem to be a credit card processing company. The outsourced telemarketer charged my credit card and it showed up as Bankcard Empire on my statement. Wouldn't it have THEIR name on it?"
"They could be one of our customers."
"Yes, but it wouldn't have YOUR name on their credit card terminal. Unless it was you."
We went round and round for about an hour. Bankcard Empire was always blameless and was painted as a respected industry leader - yeah, in the scam business.
Since I had been scammed and couldn't get my money back, I had to stir up some shit. I called Bankcard Empire and complained that I never got the use of my coach. "I paid to have a coach. I WANT A COACH. Have him call me ASAP."
I got a call from the coach the next day. He identified himself as being from Universal Marketing. (They have no website, so this was another Bankcard Empire shadow company.) He was trying to sell me a search engine tool that would get thousands and thousands of hits to my Bankcard Empire website.
My first statement to my coach was, "The website that Bankcard Empire gave me is what is called a replicated site, it is a sub-site of another. Replicated sites are ditched in the farthest and deepest sewers of the Internet, no one will ever find them. You'd have better luck finding Jimmy Hoffa."
This statement he ignored and continued with his pitch. He told me to go to a website, which has since been taken down. It was a single page of affiliate ads, featuring some large corporations and some banks. (Affiliate ads, BTW, are free. Anyone can sign up with an affiliate program and put their ads on their site. I have them on this blog). At the top of the web page was a Google search box.
I asked him how that web page was going to drive traffic to my website. He told me, "With the power of Google." WHAT? "So you're going to use Google to get me noticed on Google?" "Yeah." What a dumbass.
Here's the kicker. He was going to "use the power of Google" for me for $20,000. I only needed to put $10,000 of it on my credit card now. "And if you don't get thousands of hits on your website, you don't owe us the other $10,000." Gee, thanks, my asshole feels a lot better now.
My point is that this moron didn't know a single thing about the Internet or how it worked. But he sure was telling me how much money I could make by "using the power of Google". It sounded so good, I was going to try using Google to get that nasty ring out of my toilet.
I hung up on him. But he kept calling back. He called back almost every day for two weeks. Every time, I ask him more questions that I already knew the answer to and then wait for his lame-brain responses. To this day, I have no idea how a search box was going to do anything for me.
But, to a person who knows nothing about the Internet, this might sound good. I get old people all the time here at the coffee shop that are in awe of my laptop and what it can do. I'm like freakin' Merlin to them. So a high-pressure scam artist that is persistent could probably suck a few 401(k) accounts dry.
Leslie Mersky, father of Bankcard Empire's president, David Mersky has a very sordid past. His associates have all spent time in prison for various cons and scams. My buddy in Maryland had files and files of court documents backing these statements up.
You'd think that Bankcard Empire being raided by the authorities would put an end to this scam. But no. There are clones. They pop up with different variations of this scam all the time. Some are even pitching credit card processing terminal businesses. I know. They call me anywhere from three to fifteen times a week. This has been going on for two years. They're all based in Scottsdale or Phoenix. They're all using the same format:
- A qualifying opener
- An audio presentation
- A closer
- The promise of a coach and lifetime assistance
- An attempt to get $200 to $500 for starting the business
I'm going to explain some more of these scams in a future post. I've given you enough for today.
If you or someone you know has been scammed by Bankcard Empire or one of its clones, you can call or email:
US Postal Inspector 877-876-2455
Arizona Crime, Fraud and Victim Resource Center 602-542-2123
Arizona Attorney General's Office : services@AZAG.gov
I'm just glad Bankcard Empire was stopped. Now it's time to kill the clones.
Federal Authorities Raid Bankcard Empire (from the ABC TV affiliate in Phoenix. includes video)
Bankcard Empire is accused of fraudulently selling work-at-home Web sites
How To Protect Yourself Against Telephone Scams | Personal and Business (On this blog)
Telemarketing Scams From Phoenix and Scottsdale Are Relentless (On this blog)
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