December 19 , 2006 -- Police and RCMP in Montreal have dismantled an international telemarketing fraud ring that allegedly targeted thousands of seniors, mostly in the U.S. but also in Canada.

Early Tuesday morning, officers with the Centre of Operations Linked to Telemarketing (COLT) fraud, led by the Royal Canadian Mounted Police, swooped down on "boiler rooms" used to make misleading telephone calls to potential victims and conducted about 50 searches.

"Several suspects are expected to be arrested on fraud charges, " the RCMP said in a statement.

Since 2003, this organization allegedly victimized 500 people a week grossing between $8 million and $13 million annually.  An unknown number of victims have lost $1,500 to $65,000 each after they were convinced to pay by a variety of schemes, according to the RCMP.

Telemarketers would contact people throughout North America to convince them to pay fake taxes, buy medical kits or subscribe to lotteries, according to police.

Some victims mortgaged their houses to pay fees demanded by marketers.  About $20,000 in cash was seized in the raids.

Western Union Management has also agreed to collaborate with COLT by closing seven agent locations in Montreal that have been used to transfer money generated through fraudulent telemarketing.  Two additional places with business licence's from another company specializing in electronic money transfers will also be searched by the investigators.

Montreal police Const. Sylvain L'Heureux said the most flagrant fraud scheme involved a fake lottery.

The telemarketers would call people telling them they were winners, and that their winnings.  Approximately 90 per cent of the victims in this case were over 60 years of age.

L'Heureux said what was particular about this scheme was that most of the victims are in the U.S., while all the criminals are "home grown."  Further, police are seeing more and more hardened criminals becoming involved in telemarketing schemes.

"Most of the people that were arrested today (were arrested) without warrants, and most of these people have criminal records related to violence or drugs, " said L'Heureux.

In the mass telemarketing schemes, the fraudsters used various methods including telling people they were eligible to receive a $7,000 grant, or selling health care kits to companies or billing them for services never rendered.

"The common feature to every scheme in this kind of fraud is that the victims are asked to pay less than $500.  And all telemarketing schemes require that the victims send money in the form of a certified cheque or money order, " said the RCMP.

The PhoneBusters Canadian Anti-Fraud Call Centre estimates that 500 to 1,000 criminal telemarketing boiler room operations are conducted on any given day in Canada, grossing about $1 billion a year.