Print

Email story

Comment

Email editor

Lure of easy money hit them hard

More than 140 people across the country were parted from their savings — more than $3-million — by a bay area businessman’s scam, investigators say.

By WILLIAM R. LEVESQUE
Published August 20, 2006

SEMINOLE — To Dan Crosbie, the TV infomercial made the deal sound like sweet, easy cash.

He could sell prepaid cell phones and minutes for them at retail outlets like convenience stores while working just a couple of days a week.

He had never heard of the company making the pitch, Global Resources Inc., a North Miami outfit whose then-president lives in Seminole.

Crosbie, 60, a retiree from Wheatland, Calif., acknowledged he did little to check Global out. He called the Better Business Bureau to see if it had any complaints lodged against it. It didn’t … yet.

In the end, he invested $29,970, draining 10 years of savings from his 401(k). He lost everything.

Global, state investigators say, was a fraud, a business-opportunity company that preyed on the financial aspirations of people on the edge, those looking for quick and easy money. An employee of the Florida Department of Agriculture and Consumer Services called the company’s scam one of the largest of its type ever encountered by the state. In all, 142 people nationally lost at least $3.26-million.

Global is believed linked to other South Florida businesses doing essentially the same thing, stealing tens of millions from hundreds of people, the state says.

“They made it sound so good it was impossible to turn down,” said Crosbie, who suffers from heart problems and high blood pressure. “This was a way for my wife and I to spend more time together before I die. I’ll never deal with a company in Florida ever again.”

Global’s head, Stewart M. Pope, 54, was contacted multiple times for this story and declined comment.

In a 2005 lawsuit agriculture officials filed against Global and Pope, the state said Global was simply designed to fool people to part with their money, getting little in return. Global opened in 2003.

The suit alleges that Pope converted or depleted Global’s assets, using funds for his personal use instead of making promised refunds. Pope has denied all wrongdoing in a court filing.

Pope and Global lost the case by default because, aside from the early filing, the case went uncontested. The state won a $960,000 judgment to compensate victims, though agriculture officials say they can find few assets to recover.

Pope is something of a mystery. Many victims never talked to him. He appears to have lived modestly. Why, for instance, would a man the state says helped steal millions own an $84,800 Seminole home?

“Obviously our attorneys were convinced that he was not just a figurehead and should be held liable for the fraud that was committed,” said J.R. Kelly, the director of the agriculture department’s Division of Consumer Services.

So far, Pope has not been charged and has no criminal record. The U.S. Attorney’s office in South Florida could not be reached for comment.

That office has made at least 20 convictions of people involved in business-opportunity scams, including William Judd, who was sentenced in 2005 to nearly six years in federal prison for mail fraud. He was a Global manager and supervisor.

Fraud experts say such scams have been around for ages, playing on two key ingredients in the human mind: greed and gullibility.

“People are inherently trusting,” said Pinellas-Pasco State Attorney Bernie McCabe. “And when you’re about to empty your 401(k) to invest in something, it’s not wise to trust anyone.”

According to state investigators, Global sold Internet-access machines for placement in retail outlets, though prepaid cell phones seemed to be its main business.

In Crosbie’s case, he received cell phones. But Global quickly changed the numbers, making their sale impossible, he said. He sold some minutes, but he discovered that people who paid for an hour often received only 15 or 20 minutes. And he never received the commission on the sale of those minutes.

“They just took ten years of my life and my savings and wiped it out,” he said.

Bob James, a recently retired regulatory consultant with the agriculture department who helped investigate Global, said the timeless gullibility of people always provides a ready supply of victims.

“People spend more time researching a new washing machine purchase,” James said. “Yet they drop 10 (thousand dollars), 20, 40 even $100,000 on a deal without spending a minute to check it out.”

James tells people considering investing in a business-opportunity company to avoid them if they’ve been in business just a few months.

“I tell (people) I wouldn’t deal with a business-opportunity company unless they’ve been operating at least five years,” James said.

Global provided many victims with numbers of references to call who had invested money and supposedly did well financially with Global. But James said these references were probably “songbirds,” people paid to provide positive testimony.

Rebecca Samuels, 58, of Mount Laurel, N.J., who lost nearly $26,000 to Global on a prepaid phone deal, said she drained her 401(k) after getting a cold call from the company.

One Global salesman, she said, played up the fact that he was in Alcoholics Anonymous after she mentioned that she was an AA member. In retrospect, she believes this was a ruse.

“In my life, $25,000 is like a million,” said Samuels, who lives on Social Security disability. “I wanted to send my kid (age 8) to college. Now I live day to day.”

William R. Levesque can be reached at levesque@sptimes.com or (813) 226-3436.

[Last modified August 20, 2006, 22:09:45]