The federal Competition Bureau has laid fraud charges against five people and four Montreal-based companies, alleging they tricked business customers into purchasing $172-million worth of office supplies and other products at inflated prices.
The operation, which the Competition Bureau said it believes is the largest of its kind in Canada, allegedly involved companies hiring telemarketers to contact potential customers and falsely claim they were regular suppliers seeking to renew their services. Business customers who took the calls were told a purchase order had already been pre-authorized by someone else in the company.
Some health care customers were allegedly told they needed to buy new medical kits to comply with new government legislation, the Competition Bureau said.
When people on the phone unwittingly confirmed the orders, the products were sold at prices up to 10 times their market value. Among the allegations, victims who contacted the Competition Bureau reported that when they refused to pay the invoices, they were threatened with collection agents, legal action or damage to their credit ratings.
“Fraudulent telemarketing is a serious crime that can have severe consequences for both businesses and consumers,” Competition Commissioner Melanie Aitken said in a release Thursday.
The Montreal-based telemarketing operation allegedly targeted businesses in Canada, the United States, Switzerland, France, Germany, Britain, Ireland, Spain, Puerto Rico and Panama. The Competition Bureau said the sales began in 2001 and ran until 2007, when the bureau executed search warrants to investigate the operation.
The release said the bureau’s investigation, conducted jointly with the RCMP, “uncovered a widespread scheme that marketed directories, subscriptions to online directories, office supplies and medical kits at inflated prices.”
The accused are Georges Haligua, identified as a Montreal-area businessman responsible for running the telemarketing operation, as well as senior manager and partner Amalia Di Falco and managers Éric Cenail, Carl Rubat-Du-Mérac and Lawrence Vitas. The companies accused in the case are Mega Byte Information Inc., Express Transaction Services Inc., International Business Logistics Inc. and Comexco Management Inc.
The accused are charged with deceptive telemarketing and misleading representations under the Competition Act and with fraud under the Criminal Code.
The Competition Bureau said several other companies were also investigated as part of the scheme, but were not charged because they have gone out of business.