Anatomy of a Scam Investigation: Chapter One

[Wondering what's going on here? Check out the Chapter Index on this series.]

I mentioned yesterday that my firm received what I believe to be a fraudulent pseudo-invoice for services not rendered. It appeared to be a variation on the classic toner scam, discussed here.

For some reason, this one seriously pisses me off. Maybe its because the fraud is so blatant. Maybe it's because the weasel-worded disclaimer designed to give them a defense to fraud claims is so perfunctory and lame. Maybe it's because after I sent an email to the scammer's lawyer, the scammer himself called me and tried to run a con on me. Like I'm a fucking rube.

So. I've decided to dedicate some time and money to investigating this scam and the people and companies responsible for it. I've also decided to write about the investigation, and use it as an opportunity to discuss con man culture and how anyone with an internet connection, a few bucks, and some time can investigate an attempted scam — or, preferably, conduct due diligence on a suspected scammer before they can even try to con you.

I'm going to discuss using Google, using PACER (which allows access to federal court records), using state court records, and taking effective action against scammers.


Every story has starting point. This story starts with my firm's office manager sending an email asking if anyone knew of work performed by UST Development, Inc. of Ontario, California. She indicated we had no record of services rendered by them, and our outside IT firm had not heard of them. I asked her to send me the invoice. She complied, sending me a pdf. Here it is:

I was suspicious immediately. It was a while before I noticed the semi-coherent and inconsistent disclaimer: "Thank you for your business. This is not a statement for services rendered but for preventative maintenance." What does that even mean? Does it mean it is not a statement for "services", but is a statement for "maintenance"?

When in doubt, I go to Google. I Googled "UST Development, Inc." — with the quotation marks, which helps exclude useless returns — and hit immediate paydirt: a report on Scam Informer. Though the primary complaint was about wages, the comments included people complaining that UST Development, Inc. had billed them for services not rendered — for $175, the same amount mentioned on our invoice:

I just recieved an invoice for $175.00 with 800-818-9777 and on it. I have no idea who this company is and what this invoice is for. I found t his posting and thought I'd share this infomation.

11 days ago by KTM 525

Ditto That, I just received the same Invoice Dated 8/01/2011 $175.00 for "Telecom Maintance/Service call." Bet they are sending this out to every company and hoping the A/P Dept doesn't check with IT to see if it's Legit.
6 days ago by Desk

I received the same invoice with a 30 day past due. I have had no contact with this company whatsoever.
I will call them and if they can't give me an explanation my next call will be to the state attorney's general office.

I noted that the complaints appeared in a short period of time, which is characteristic of fraud schemes — fraudsters tend to spam their victims and then change schemes and disappear within a few months after the complaints pile up.

More about that first report on Scam Informer later: it's where I first encountered the names David Bell and Brandon Bell, which will figure prominently later in this investigation.

At this point I was satisfied that I was dealing with a scam, and told my office manager not to pay the invoice and to keep a watch for anything similar or any communications from the company.

In our next chapters, we'll talk about pursuing UST Development, Inc., and pursuing David Bell and Brandon Bell through records of, for instance, bankruptcy proceedings. The main point: with a few bucks and a few minutes, you can track down an astounding amount of information about people trying to cheat you.

But first, let me anticipate the scammers' defense and the devil's-advocate arguments I may draw: how can it be fraudulent if the invoice says right on it "Thank you for your business. This is not a statement for services rendered but for preventative maintenance"?

Simple: fraud law doesn't work like that.

Whether a communication is fraudulent — for the purposes of criminal law, torts, or consumer protection law — depends upon communications as a whole. Scammers cannot insulate themselves with fine print, hidden disclosures, or contradictory disclaimers when the entire solicitation is intended to defraud and is misleading to a reasonable person. Now I go all lawyery on your ass: See, e.g., Federal Trade Commission v. LLC, 453 F.3d 1196 (9th Cir. 2006) (apparent "refund check" that, if cashed, signed up recipient for monthly fee was deceptive even if back had disclaimer that would have informed customers if pointed out to them).

Here are the reasons why the UST Development, Inc. "invoice", taken as a whole, is fraudulent:

1. It's made to look exactly like an invoice for services rendered.

2. UST Development will argue that it's only a solicitation for business, but nothing on the invoices advertises or describes the type of services UST Development offers, or why a consumer should choose them, making it appear even more like an invoice rather than a solicitation. (See, supra (“[t]he receipt of a check, the perusal of which would reveal no obvious mention of an offer for services, no product information, and no indication that a contract is in the offing, coupled with an invoice that has no advertising or solicitation purpose, creates an overall impression that the check resolves some small, out-standing debt.") What honest and competent advertiser would try to solicit business with a document that describes the services offered only as "preventative maintenance," without offering any indication whatsoever of what type of maintenance is involved or why the recipient should choose this particular business to provide it?

3. Contrary to the argument that the invoice is merely soliciting business, it shows amounts "due" on past dates, an assigns those amounts fictitious invoice numbers. It also refers to the charges as a "balance", and places the total in a box for "1-30 days past due" rather than "current." If it's a solicitation for future business, why are those dates in the past? And why does it break it into two items for two dates? All of this is designed to create the impression that it is an invoice for services rendered in the past, and is intended to create that impression.

4. The cheesy "disclaimer" itself is incoherent and internally inconsistent. If it's a solicitation, why does the disclaimer thank the recipient for business that the recipient hasn't given yet? It says it's not a statement for services rendered, but "for preventative maintenance" — what does that mean? How does it explain that it's only a solicitation?

5. Finally, if this is truly intended only as a solicitation — if the "solicitation" angle is not merely a dishonest dodge, a planned defense to fraud allegations — then there will be proof. Somewhere, some companies have probably fallen for this and sent UST Development, Inc. checks based on these invoices. If UST Development, Inc. is honest — and not engaged in mail fraud — then it's responded to those checks by contacting those companies to schedule the preventative maintenance they've paid for, right? How about it, UST Development, Inc.? If the FBI served a search warrant on your business, would they find evidence of you providing those services, or trying to do so, to companies that sent you checks?

[Edited to add] 6. It doesn't satisfy federal law governing solicitations made to appear like invoices. See, e.g., 39 U.S.C. section 3001:

(d) Matter otherwise legally acceptable in the mails which—
(1) is in the form of, and reasonably could be interpreted or construed as, a bill, invoice, or statement of account due; but
(2) constitutes, in fact, a solicitation for the order by the addressee of goods or services, or both;
is nonmailable matter, shall not be carried or delivered by mail, and shall be disposed of as the Postal Service directs, unless such matter bears on its face, in conspicuous and legible type in contrast by typography, layout, or color with other printing on its face, in accordance with regulations which the Postal Service shall prescribe—
(A) the following notice: “This is a solicitation for the order of goods or services, or both, and not a bill, invoice, or statement of account due. You are under no obligation to make any payments on account of this offer unless you accept this offer.”; or
(B) in lieu thereof, a notice to the same effect in words which the Postal Service may prescribe.

No. It's clearly fraud. It's not a close call. If I were still a fed, I would feel perfectly confident taking this to trial based just on what we know so far — and I would win.

But this isn't all that we know. Oh, no. Not by far.

Tune in for the next chapter, when we use Google, PACER, and other resources available to everybody in order to corroborate our fraud case, and to find out the background of the people involved. It's rare to find a first-time fraudster — and believe me, ladies and gentlemen, we have not here. In further chapters, I'll discuss the alphabet soup of federal, state, local, and private agencies that I'm going to bring to the party.

See you soon. Remember: scammers are scum.

Edit: Chapter Two is up. So is Chapter Three. So is Chapter Four. And now Chapter Five.

    Edited to add: Cynthia Bell, wife of David Bell, or a person pretending to be her, sent me an email that contained, in part, the following response about the fraud analysis above:

    "This mailing was nothing more than a marketing tool to rebuild a business after a devastating loss. There were no threats of being sent to collection, no run around. If the client calls the office, they get a human being who explains the benefit of purchasing the service agreement and if they decide they do not want it, they are permanently removed from the database. If they paid the invoice, they received a welcome letter outlining the service agreement and what was included with their payment. There is no fraud here. Every single person who pays the invoice will receive the service they are paying for."

I find this completely unconvincing, for the reasons already enumerated above, and for reasons shown in the next chapters of this discussion.

Additional update: please read this important note.