Anatomy Of A Scam Investigation, Chapter Ten

What's this all about? The index of prior chapters is here.

Greetings, scambusters. Back in Chapter Nine I pointed out that David Bell and his UST entities were still, months after being revealed, running the mail fraud scheme I first described in Chapter One.

Tipsters from across the western United States continue to send me examples. Here are invoices received in Arizona, Oregon, and Washington. I've redacted them to protect the intended victims from any con-man harassment or retaliation. There are a few important points to note:

1. David Bell and his UST companies are going aggressively multi-state. The is common with mail fraud schemes as they develop — it's harder for victims in other states to get law enforcement support.

2. Either my tipsters are disproportionately government workers, or Bell and his team are targeting government offices for the invoices. That is not uncommon among fraudsters — accounts payable procedure in federal, state, and local government offices can be lax, and bogus invoices can yield successes that private targets do not. Of course, targeting government offices also opens up a new array of criminal statutes . . . .

3. Bell and UST are morphing and rebranding the scheme. Previously their invoices used "UST Development, Inc." as the soliciting entity. Their next generations of invoices use a generic "UST" and use a reference to the "www.us-telecom.com" url rather than "www.ustdevelopment.com" (though both lead to the same site). Bell has almost certainly made this change because the Google profile for "UST Development" overwhelmingly emphasizes fraud, whereas the generic "UST" reveals little. Scammers commonly change the names and branding associated with their schemes in order to make it harder for potential victims to detect the fraud. Though there are a few stray internet references to a "UST, Inc.", research at the California Secretary of State's Business Search Portal shows that there is no current, active UST, Inc. authorized do to business in California.

4. Bell is also changing his mailing address. Note that the latest invoices change from the familiar Ontario street addresses to an Ontario Post Office box address. Once again, this helps Bell and UST stay one step ahead of Google — the street address search results are cluttered with references to fraud, while the new box is relatively "clean." The aim is to thwart the very casual searcher. Google shows me that the box number — at least at some point — was the mailing address of the Ontario branch of a national auto supply company. In a few Friday calls, low-level staff at the company professed ignorance of the box. It's possible that the company abandoned the box and Bell and his team bought it. It's also possible that a member of Bell's team is an insider at the company and is using their box as a "safe" mail drop. I'm following up with some calls higher up the chain, as well as correspondence to the company's national office. We'll see.

5. At this point, I'd characterize the evidence of fraudulent intent as overwhelming. Con artists typically plan to argue "we meant well, we didn't realize there was anything wrong or misleading about this solicitation." That defense has been thoroughly stomped by now. Leaving aside their communications with me and their monitoring of this series, David Bell's UST team has been busily responding to dozens of Better Business Bureau complaints, saying roughly the same thing every time:

I would like to start off by apologizing for any inconvenience or confusion this invoice may have caused. We here at UST sell, service, and maintain business phone systems and inside wiring. The invoice you received was not for services rendered but instead for preventative maintenance for the year to come. The preventative maintenance covers your inside wiring and preventative maintenance for a 12 month period, opposed to being billed for every service call, or at 15 min increment. This is an invoice that is sent out once a year for a full service maintenance agreement. This invoice is optional; it is not a mandatory service. Once again I apologize and I hope this clarifies the misunderstanding. We will not contact this company in the future.

Bell and his team probably see this as keeping their stories straight. In fact, all it shows is that they were aware that many consumers found their advertisement to be confusingly similar to an invoice. Yet they've continued to send that invoice, without major substantive changes, across the West — even after the Better Business Bureau (and I) pointed out that it violates very specific federal law prohibiting ads made to look like invoices, and even after the BBB turned up its fraud rhetoric against UST. In fact, they've continued it after local media has reported on the scam. This utterly quells the "it's not really misleading, we didn't mean to mislead" defense. If Bell and his team had been acting in anything remotely resembling good faith, they would have altered the invoice to comply with federal law — or at least to remove the elements that make it so misleading.

They've made very small gestures towards changes — for instance, by changing "amount due" to "amount," and removing the "past due" boxes — but the document overall is still clearly designed to look like an invoice, and the change really does little more than prove consciousness of guilt.

Moreover, I suspect that law enforcement investigation and/or civil discovery will demonstrate that the "we actually provide preventative maintenance" defense is fraudulent. The bankruptcy cases of UST Development, UST Dry Utilities, David Bell, and Branden Bell contradict the suggestion that they have the equipment and resources to provide preventative telecom maintenance across the West. Moreover, several tipsters indicate that they have called and asked "UST" to send them materials about the services offered, but have not received anything.

Many have expressed frustration that David Bell and his crew are able to conduct mail fraud so openly for so many months without result. I admit I have been frustrated as well. However, at the moment, for reasons I will not discuss, I am not frustrated. More on that in the next chapter, perhaps.

Last 5 posts by Ken White

Comments

  1. Kelly says

    Many have expressed frustration that David Bell and his crew are able to conduct mail fraud so openly for so many months without result. I admit I have been frustrated as well. However, at the moment, for reasons I will not discuss, I am not frustrated. More on that in the next chapter, perhaps.

    Ken, you are such a tease.

  2. VPJ says

    First more Marc Stephens and now more scam investigation. My cup runneth over and was refilled with a double shot of entertaining goodness.

    Or a double shot of good bourbon. That works too.

  3. trepto says

    As a note, the item you originally received from UST is a statement, which is a list of open items (i.e.; unpaid or partially paid invoices) on an account. Statements will often break items into categories by days past due. The recent item is (or appears to be :\ ) an invoice, which generally won’t show “days past due”. It might be worth putting the word out specifically for newer statements generated by UST; not only does a statement imply an ongoing business relationship, but past due items are more likely to be given the “pay first, ask questions later” treatment.

  4. Dizo says

    UST is working it's way East. I came across your site while researching an almost identical "invoice", as you posted here, sent to the government office I work at in Minnesota.

  5. mojo says

    "Don't the good book have some specific injunctions about killing, Preacher?"
    "Indeed it does, son, mighty specific. It is, however, a little more open-minded on the subject of kneecaps."

  6. Saedi Folluf says

    This (installment ten) page is linked as chapter nine (twice in a row) on your index page for this series. Keep up the pressure, I applaud you!

  7. Andrew Feldstein says

    Shouldn't you have also blacked out the invoice numbers so the scamsters themselves can't even identify the tipsters?

  8. says

    Andrew: I strongly suspect that the invoice numbers are randomized, drawn from a small overlapping pool, or at least not used to keep track of which invoice went where.

  9. Rich Rostrom says

    In Chapter Eight of this series, you commented:

    In my experience, nobody is as chilling as a career con man. The level of sociopathy — the extent to which everyone is merely an object to be manipulated — is difficult to grasp. So is the sheer relentlessness and remorselessness of the conduct.

    But the entertainment mass media have romanticized con men for many years. Case in point: last night I happened to walk in on my mother while she was watching The Music Man – a highly regarded work of entertainment about a roguish yet lovable con man.

    How do you feel about this sort of thing?

  10. Craig says

    The scheme has now hit South Dakota as well. The South Dakota Public Utilities Commission has attempted to contact UST but they won't respond… big shocker there.

    It appears they are targeting school districts because they assume nobody will be paying attention. These people are the scum of the earth… right below the people who take up two parking spaces at Target.

    http://www.argusleader.com/article/20120211/UPDATES/302110034/PUC-warns-of-deceitful-billing-scheme

  11. Guy says

    The city of Lewiston, ID has posted a fraud warning on the front page of their website about UST: http://www.cityoflewiston.org

    As an added twist, the local radio has reported that the Nez Perce Tribal Gov't may have been a victim of UST as well. Would having a federally recognized sovereign nation as a plaintiff open up any different options?

  12. Arclight says

    As one of the tipsters, I'm not sure it matters if he identifies my company by the invoice number. Since this is a solicitation, aren't we just generating him free advertising by posting it to a much wider forum?

  13. Laura K says

    "Pay no heed to them, they were killed of their own idiocy…"

    Henry Knox, Secretary of War, 1790s.

  14. Joe Pullen says

    Hey Ken, here is to hoping we will hear from you again soon. Especially on this particular subject. I think I'm having withdraw symptoms. Likely you are working in the real world on some interesting case.

  15. Rich Rostrom says

    I've been reading this series from the beginning. So before I ordered a temperature controller from "ScienceLab.com" last month, I should have smelled a rat. Google would have warned me.

    But I just placed the order. They immediately informed me the item was on backorder. After three weeks of hearing that it was on backorder, I learned that our credit card had been immediately billed. I definitely should have smelled a rat then.

    But last week I got an assurance that the supplier (which they never named) would ship that week, and when they got it, they would ship to me.

    (Very odd way of doing business these days. If one doesn't stock the item oneself, why waste money having the item shipped to one and re-shipped, rather than drop-shipped directly to the customer?)

    Yesterday, they went back to the "backordered, will ship in 10 days" line. I said to cancel the order. They informed me that after three days, they only offer "store credit". I finally recognized the scam.

    They are going to regret this. I have nothing better to do than go after them. I'll be reviewing this series for techniques and methods.

  16. Adam says

    I'm getting antsy; Simple Justice closed shop, and now Popehat hasn't posted jack for half a month :(

  17. says

    These false invoices are showing up all over the midwest presently (3/1/2012). It's very frustrating that these scammers have continued to operate, and are still continuing to operate. These perps are obviously consumate scam artist professionals. Let's hope they can eventually be brought to justice, but… I'm not holding my breath.

  18. Don't be fooled says

    *** Name change ***
    Branden Bell is now the "Director" of the new company name, California Consultants Group, located at a new office in Pomona, CA. Has anyone come across invoices with an address on Bonita? I think its 527 or 537 Bonita Road or Ave. I'll see if I can hunt it down and update.

  19. joug says

    I'd bet [NAME EDITED] is one of the scammers.

    Joug: I don't know who that is, and I'm not going to let you accuse him anonymously and without evidence. Feel free to email me, or to elaborate.

  20. Jenelle says

    Thank you for your website. We are a nonprofit based out of Sedalia, Missouri and we received what looked like an invoice from “UST” in the mail yesterday.

    The address is
    P.O. Box 970
    La Verne, CA 91750-0970
    Phone# 800-217-9437
    Fax # 626-205-1133

    The website is: http://www.us-telecom.com

    The description is “Telecom Maintenance Agreement”
    Rate: $425
    It also says “Thank you for your business, this warranty covers preventative maintenance on all telecom system equipment, including, telephone instruments, switches, routers, & cabling”

    Just wanted to give you the heads up it hit Missouri. When I called the California BBB they said they had received one other complaint from Missouri in the past week.

  21. Mike says

    We just received an identical invoice in Illinois for "Telecom Maintenance Agreement" that Jenelle had posted. Since I pay the Telecom invoices, this was a humorous. The same invoice went to several agencies I support. I guess they are now targeting government agencies too…