when a used car dealer tells you that a car is a real cream puff almost like new with low mileage hang on to your wallet the car may have been around the block a lot more times than the odometer the mileage meter shows sellers turn back that clock to make buyers think the car is in better shape than it really is and in Houston 9 months ago we saw how easily it's done there two ways to do this I'm going to do it the easy way this is not a demonstration for our television camera what you're watching is a crime in progress this man is adding about $2,000 to the value of this 1985 Buick by losing 50,000 Mi off the odometer in the used car business it's called busting miles or whipping miles where you grab them has a whole lot to do do how they turn out he doesn't know we're taping him we set up a hidden camera in a nearby Van before he arrive he charges $50 a car and expects to make $400 today tax-free and he didn't even start until after lunch these are the men who hired him John hazet and Charles Vance two former used car dealers who invited us down to Houston to help expose the crooks as far as odometer rollback men themselves the person that does the mechanics of it there's uh I would say 50 in town find them in the edges no but you can pick up the phone and do it we did it we had them waiting in line to do it the reason Charles Vance and John hazet know so much about the used car business is they were in it for 20 years until they got fed up and quit they told us so many of their competitors were rolling back miles there was no way to survive in the business without doing the same thing Houston Police told us they were trustworthy and reliable the way the business is right now is completely dominated and controlled by mile Busters which has inflated the car prices to a certain level that a legitimate wholesaler cannot operate in it one of the first people Charles and John introduced us to was Bill Whit low the heavy set fellow and the Boss Hog hat he's been a used car wholesaler for 40 years and is called the granddaddy of the Houston mile Busters Whit low will buy a tradein from a used car dealer roll back the miles then sell it to a different dealer our camera was hidden across the street when Whit low began bragging about tens of thousands of miles he's rolled off these cars that one was 65 65 what's on it now and that one was 70 I know what it was and they're 40 and 40 now let's see what they got 39 39,000 mil got 42 but rolling back the miles is only half the trick the ti title has to be forged to match the new odometer reading Charles and John told Whit L that they already had somebody who could Forge the titles Whit said he could do it better and probably cheaper what they been charging 200 a coper oh damn I ain't going to tell you who's doing man but well how much will you charge I don't want to know who's doing it $100 a c damn we'll go for that what abouted what about if John gives you like uh 30 of them a week any cheaper uh we make okay you'll handle them all so Charles gave Whitlow a title and asked him to forge it lowering the odometer reading by 60,000 mil when Whit low brought the finished product by the next day we had the camera concealed behind a wall in Charles and John's office I put on sunglasses and posed as a friend of theirs who might want to invest $100,000 in Whit Low's roll back operation he's already chains of miles and you can virtually not detect it I had never had a one came by I guess I've been lucky but I guess you that are good just good work yeah good work good work and plenty of it plenty of titles plenty of cars how many of these you do a month good month I'll do 75 i s Whit low claims he makes less than $1,000 a car but that's still pretty good money how much money does he make a month I say average month you'll make 50 grand 50 Grand yeah see I'm not as fast as I used to be I know the best part of it for Whit low is he says the $50,000 a month is all taxfree well I ain't filed income tax myself in 13 years 15 years but there is no wholesaler stand in this town that's making money it's not whipping mes is that true I don't know none that's right this is not exactly legal right what this is not exactly legal right what's the downside I want to know what the downside is it's not exactly legal no we found this bill Whit low special on the used car lot of Russell and Smith Ford a 1987 Aerostar van a real cream puff and only 52,000 Mi according to the odometer but Charles Vance and John hazelet have been tracking this van when Bill Whit low bought it from another Houston dealer it had 131,00 000 mil on it when he resold it to Russell and Smith Ford 880,000 M had vanished with our cameras hidden we asked the salesman about the van 52,000 [Music] miles and you're sure the mileage did I just figured out who this man looks like you look like that guy that does that 60 Minutes thing on TV you do you look like that guy Steve C yes how you doing you your name is Raymond Mesa Raymond nice to meet you Steve I am no you're not I am what would you say Raymond if I told you that this car had 131,000 Mi on it I'd say you could show me so we showed him and odometer statement proving that when the van was sold to Bill Whitlow it had 880,000 more miles on it that surprised Mesa and soed our camera that's amazing general sales manager Vince alfano and used car manager Tom delisi agreed that the van had been rolled back okay we um course we probably took it on a trade in and people trade them in signed an odometer statement stating the actual miles that you know on the car we don't follow the people around for years we just take Cs on trades and have you ever heard of a gentleman by the name of Bill Whitlow no yes I do you you know Bill Whitlow yeah uh I think you bought this vehicle from Bill Whitlow 73 number it's possible suppose I told you that bill Whitlow told us just about an hour ago that um the only cars the only cars he ever sells are all had their odometers turned back would that surprise you yes it would maybe he really was surprised but Bill Whitlow had told us earlier that most dealers suspect his cars have been rolled back they have an idea they don't want to know it you know they they got an idea yeah that's not true cuz I do not know that he's the only one in town that wouldn't know if he didn't I mean it's just common knowledge you know flies gather on horses build with little hit miles Vance and hazelet say it's not that difficult for a dealer to find out if a car's been rolled back the dealer can check its title history even its service record you could have taken five more minutes you could have taken the serial number from this car punched it into your computer found out the last time this car was serviced who owned the car and what the mileage was right I don't know I that's possible but authorities say few dealers make the effort they bring it in it looks like it's got 52,000 mil on it looks pretty clean you don't see any reason to check you don't want to know if it's got more no in my opinion it's his obligation and his job to check that car and if a man has been in a car business for 20 years like he said he had and he can't tell the difference between 131,000 Mi and 52,000 Mi he needs to get another job what percentage of the car sitting on used car lots have had their odometers rolled back I'd say 40% of the cars really I was going to say 50 out of 200 definitely cases that I've investigated myself how many Bill Whit lows are there in Houston only one bill Whit low if you ask me how many mile Busters there are in Houston let's say there's probably uh uh 15 large ones and a lot of small ones a lot of small ones at Greens Point Dodge we found a red Toronado that had been whipped by another wholesaler we showed the salesman proof that the car had gone at least 78,000 Mi even though the odometer showed only 49,000 this time the sales manager didn't seem all that grateful for the information I don't have talk you hey you went out to make them off what's what's we just had a question hi my name is Steve C I'm Jim Willis how you do for 60 minutes we're here looking at this car and we just wanted to know where did those 30,000 Mi go and how did this happen I have no idea but You' looked at the piece of paper yeah I've looked at it now I'm going to call the guy that sold me the car and make him buy it back but first he gave us one last chance do you want to buy the car I don't think we want to buy it at the price you're asking then what are you worried about it for clearly someplace along the line this car is lost 30,000 Mi I just want to find out if you knew about it no I don't know about it and we do not do anything like that a apparently Greens Point Dodge did not have anything to do with the roll back the odometer was whipped by the wholesaler who had bought the car at an auction you say right here 170,000 cars get auctioned every week many are high mileage late model cars perfect for wholesalers who can roll up profits by rolling back mile anglo-american auctions headquartered in Nashville Tennessee says it spent $2 million on a computer system to try and keep roll back cars out of its auction but security Chief Gary Dickson admits that he can't prevent buyers from busting the miles later we see where the problem is and we're helpless to do anything about it Dickinson says the problem is every state has a different kind of title and all but a few are too easy to forge what's the answer uh a uniform title so you're talking about standardized title forms throughout the country absolutely would that wipe it out it would go a long way to start I'll tell you what if I had to quit it I'd get out of the car bu couldn't make any money if you didn't do I don't believe enough money for me out there if I do it a gentleman I want to show you one I want to show you one thing all right you know what's back there what back there no there's a TV Camera back there is yeah okay we've been uh we've been taping this whole thing well all right the good news is we're not cops well I didn't think so the bad news is is we're 60 minutes and you're not worried about the cops not really and by the way according to Charles Vance the truck Bill Whitlow rode off in had been rolled back 70,000 Mi after we left Vance and hazet got threatening phone calls and a more serious warning someone fired two bullets through their office wall the gunshots were actually about uh less than 100 yds from where I live so I have a a major concern for my family at this time Vance and hazelet say because we came to Houston police are now taking a closer look at odometers and dealers are taking a closer look at cars they buy from wholesalers but the threatening phone calls keep coming is this Charles V this is he buet Hol you found your building are nothing compared to buet holes you're going find your body you and John don't stop this 60 Minutes mhm uh do you understand what I'm saying yeah this is your last war I'm tell this right now in response to our story Federal investigators indicted Bill Whitlow and four others for odometer tampering two of them have already pleaded guilty and three weeks ago a man who confessed to shooting those bullets into Charles Vance's office said he did it for Bill Whitlow in retaliation for the 60-minute story there have been lots of stories over the past few months on identity theft and how the information can be used against you you may have heard something about stolen identity tax fraud you may even have been a victim of it it's the biggest tax scam around right now as we first reported in September this is how it works someone steals your identity files a bogus tax return in your name before you do and collects a refund from the IRS it's so simple you would think it would never work but it does it's been around since 200 8 you'd think the IRS would have come up with a way to stop it it hasn't instead the scams gone viral tripling in the last three years the government says it's affecting millions of Americans and costing taxpayers billions of dollars every year proving once again what every good con man already knows there is no underestimating the general dysfunction and incompetence of government bureaucracy the tsunami of fraud that we have been encountering the vast number of of of fraudulent tax returns was something that I don't think the IRS ever really uh was ready for this is a Will Fredo for rare is the United States Attorney for southern Florida and George Puro the agent in charge of the Miami Field Office of the FBI together they run a federal task force operating at the epicenter of the largest tax scam in the Country Florida um has been third year in a row on the top number one in terms of ID theft complaints and Miami is also number one in terms of metropolitan areas that suffer from Identity fraud don't take this the wrong way is there any scheme that Miami is not number one at we have very uh sophisticated and good criminals uh Steve who who know how to how to you know defeat the system for decades now South Florida has been the Silicon Valley for scam artists drawn here by the weather the beaches and the opportunity to make lots of money without actually doing much work there's Medicare from fraud mortgage fraud Securities fraud and now what the justice department calls stolen identity tax refund fraud a tax preparation scheme epitomized by an overabundance of questionable looking establishments that have sprung up here over the past few years but this scam is so easy you don't even need an office for this fraud all you need is a laptop someone's Social Security number and date of birth not even their name they can do it from their kitchen table they could do it at a fast food chain restaurant or they can do it uh on the beach as long as they have Wi-Fi access actually Cory Williams says you don't even need a laptop you can file phony Returns on your cell phone if you have the right app he used to be a legitimate tax preparer until his boss turned him onto the scam before he was arrested and sentenced to 40 months in prison he' made millions and millions of dollars anybody who knew about it you'd be a fool to not not try to get involved with making some money I could wake up in the comfort of my own home and um just get on a laptop do about 15 returns a day uh 15 * $3,000 a return that's $45,000 a day so you had a home office yeah I used to work in I I would work in my boxes and a t-shirt yeah it's as easy as one 123 Williams gave us a demonstration one you collect or buy a list of stolen identities that are readily available in Miami if you know the right people two you go to one of dozens of tax preparation sites online and using the stolen Social Security numbers and dates of birth you fill out a completely bogus W2 form claiming a modest refund of a few th000 it has given us a refund of $483 three you tell the IRS if you want the refund mailed your house wired to your bank account or loaded onto a prepaid debit card you have any idea how many returns how many bogus returns you fill that has to be like in the thousands did the IRS pay all of them on a percentage range You' say they would pay out 40% of the tax returns once you hit the send button how long did it take you to get a check 7 Days s days yes so you'd send in these returns and S Days Later you'd get a check yes 40% of the time 40% of the time where would you have them send the check uh you can send the checks to our address any address I've seen cases where 25 checks came to one address and the mailman delivered it it sounded so outrageous we wanted to run it by the federal task force so you just put down a name and a social security number and make you could make up an employer or the amount of money that was earned and withheld and send it off to the IRS and they'll send you a check back for the refund they will pay most of the time unless they catch that there's some fraudulent you know information and then it's our job uh to chase I'm still amazed that you don't need to provide any documentation when you file your tax return there are no uh supporting documents when you're filing electronically and that's the ease or the convenience that was created for the benefit of the innocent taxpayer which is now being exploited by criminals you would think that the IRS computers would notice that they were sending thousands of checks to a handful of address addes but they didn't and you might expect that the IRS would match taxpayer returns with legitimate W2 forms filed by employers it doesn't do that either because the law requires refund checks to be sent out within 6 weeks and employer W2s are often not available until months later so if a bogus return is received before a legitimate one the check will go out to the Crux the way that you learn that you become a victim of this is when go and and try to file your return and the IRS tells you oh you've already filed you're like no I haven't I like yes you have well it wasn't you it was the fraudster who used your identity to file the return and it's not an easy problem to get fixed many of the people in this line outside the IRS office in Plantation Florida are victims of the fraud waiting to prove their identity and claim their rightful refund they will eventually be reimbursed but it can involve massive amounts of paperwork multiple visits to the office in months and months of waiting did you know about this before you got this job I had no idea about this before I started getting brief last fall John cinan is the commissioner of the IRS its fourth commissioner in just two years it's become a high turnover position in part because the agency has been beset by a number of embarrassing problems including stolen identity tax fraud that have led people to question its competency I mean it looks to me like the IRS got really outsmarted by some people who were not all that bright or not all that ingenious what happened was a lot of people discovered that a social security numbers are either easy to steal or find or buy and then B you could file a false return Why didn't anybody anticipate that well I think it goes back to the fact that people didn't anticipate Social Security numbers uh were going to be so readily available uh the Assumption was uh until very recently that a social security number was a part of your identity that you protected and took great care of so that uh no one actually ever expected that those would be easy to get a hold of but there were plenty of warnings the Senate finance committee held hearings on Stolen identity refund fraud way back in 2009 when then IRS commissioner Douglas Schulman testified I discussed the issue of identity theft with the senior leaders at the IRS my first day on the job there were more hearings in 2011 and another in 2012 with Deputy IRS commissioner Steve Miller we cannot stop all identity theft however we are better than we were uh and we will get better still in those ensuing years the number of cases of stolen identity refund fraud have risen from 51,000 to nearly 3 million in the year 2012 the department of treasury's Inspector General predicted that by the year 2016 IRS will be hemorrhaging and losing $21 billion due to this type of fraud it's only 2014 don't you think something can be done in the next two years to fix this well that is my hope but it will not be easy the entire IRS system uses Social Security numbers as its primary means of identifying taxpayers even though they're now ubiquitous in public private and corporate files just waiting to be sto en by thieves the key to this is to have somebody in the inside or someone who has access to our social security numbers to our date of birth and a lot of these individuals are insiders in big institutions in Banks hospitals schools clinics we would approach anyone who worked at like a dental office anybody who worked in a medical field you would you would just approach them you tell them if they get you a hundred names you'll give them $1,000 these people easy to find in Miami very easy very easy as you would think if you went in and started knocking doors and asking people that worked at hospitals and doctor's offices and Dennis office somebody would call the cops no they they needed the money more than they wanted to call the cops everybody was with it everybody was with the scam was this like a community of people doing this uh more like a a a nation of people doing this it's gone from hundreds of people filing hundreds of fraudulent returns to thousands of people filing millions of fraudulent returns and it's become much more organized us attorney for air says some people are even setting up franchises we have had uh defendants masterminds of these schemes uh engage in filing parties and what they do is that they invite their friends to a hotel room or to an apartment and then they tell them how to do it in return for a cut of these tax returns you make it sound like mway or Tupperware that's what we've seen even ferrer's old boss us Attorney General Eric Holder had had his identity stolen in an IRS refund scam and a number of members of the task force have also been victimized including North Miami Beach police officer Rocky Festa who says local police departments have been hit hard just aventur had uh nearly their entire department which was 50 some odd officers got hit Davey fire and Davey police uh it was in the hundreds on they were all victims of tax return fraud Festa and his partner Craig Caitlyn now work exclusively on tax refund cases and were among the first to discover the breadth of the scam 5 years ago when they began finding tax documents and stacks of prepaid debit cards when they pulled over suspicious Vehicles here's a wied plastic with the card you can get one of these prepaid debit cards almost anywhere usually without providing identification you then deposit and withdraw money from it is needed it's like a bank account for people who don't have one now is that a Visa real Visa card it's a real Visa card and you so you can go into convenience store and buy a Visa card right off the shelf if you want the IRS will electronically deposit tax refunds directly onto these cards no questions asked eliminating the need for Crooks to ever actually set foot inside a bank or to try and cash a refund check they can spend the money in stores or withdraw it from ATM so this this kind of like a throwaway phone yes sir yeah once the money goes on the card you empty the money off on ATMs and you put the card in the garbage it's pretty good the prepaid cards are now used by millions of Americans to collect $42 billion in government entitlements like Social Security and Medicare payments IRS commissioner cinan thinks it's an invitation to commit fraud the prepaid cards are the currency of criminals our problem is you can't distinguish the number of a prepaid card from a legitimate bank account almost impossible to trace right it is uh almost impossible to trace why doesn't somebody put an end to that there are significant percentage of the population unbanked as it were called if you don't allow them to use a prepaid card uh they're going to have to get a check and I'll have to pay somebody a lot of money to cash that check so you're disadvantaging a significant part of the population and empowering a criminal Network and you're empowering a criminal Network five years into the scam the IRS can still not always tell if the person filing the return and claiming the refund is actually the real taxpayer by comparison the credit card companies are much better at flagging suspicious charges before they're paid out credit card companies don't have that much of a problem with why can't the IRS do that so that's the direction in which we're going uh it's a significant um move into to the what I call the 21st century we're still kind of in the late 19 1900s but this is still still a big problem that we have while we're making great progress we've got a lot of work to do and they're having trouble keeping up with the con artists last month the IRS announced that hackers had busted into its computer system and stolen another 104,000 taxpayer identities which so far have been used to collect nearly $50 million in bogus refunds as for Cory Williams he's now in jail serving his 40-month sentence 1- 800 con man is a tale about credit card fraud a billion dooll business and while that may not surprise you I think what we found in Miami certainly will it surprised us for four long years before he was convicted of murder a crafty con man named Danny feris ran a nationwide jail house Shopping Network for he ran it all without ever leaving his cell in Miami's Dade County Jail where Believe It or Not inmates have telephones right in their jail cells and can make local calls and 1 1800 calls free of charge I would challenge you Mr Wallace if they put you in a room the size of your bathroom at home for years at a time with a telephone that I would challenge you to that you would come up with some pretty inventive stuff to do because you do everything through the phone and that's exactly what Danny feris did using a telephone from a large cell on the 10th floor of Miami's Dade County jail and later from this 6x8 ft sale Federal investigators acknowledge he managed to steal as much as $2 million worth of merchandise and how did the business work accomplices on the outside provided fairies with hundreds of credit card numbers taken from charge slips in hotel dumpsters and then he used those credit card numbers to order merchandise from mail order cataloges by telephone arranging for the items to be delivered overnight again to accomplice on the outside who would sell the goods and split the proceeds with faires F's even persuaded his fellow inmates to let him use their extension telephone as his own private line you take the extension phone into your cell actually it was a vacant cell that I quite literally had turned into an office the we we were having a ball and you did business oh yes sir a bumper business and it went on for four years with faers ordering everything from collectible gold and silver coins to Rolex watches to video camcorders and with the help of those accomplices on the outside he hits States from one end of the country to the other oh it's so easy to find Confederates I split right half with everybody I mean I never took more than half it I I got robbed a lot but again you kind of take it on the chin you know what I mean it was like you said it heck it was all free so he ordered cases of the best champagne and Gourmet gift baskets and thousands of roses and they had them sent to the families of other inmates and even to his prison guards they're working steps you know they're not making much money and they're seeing this stuff going on and they're hearing about Don Peron and trips to the Caribbean and there there I am in my C they know what's up there's not you know and you know I tried to send at Christmas and on holidays I tried to send out you know baskets and and it cost them nothing oh no no perish the thought of course jail officials deny that guards accepted gifts but one investigator told us off camera that he believes some guards did receive items from Dany and we even found evidence that Dany dabbled in charity I have here a save the children Federation Inc Westport Connecticut addressed to Daniel Ferris 11:51 Northwest 11th Street sweet 104 that's your jail cell yeah I'll be done save the children well yeah here again when you have nothing but 24 hours a day and you know late night on Sunday night after everybody has gone to bed for sure they always put these little poor pitiful with flights crawling out of their nose bafing babies and stuff on the I mean heartbreaking stuff 1 1800 number masterart and visa and it's just a phone call my position was when the people got their credit card bill and look at it and they say well I didn't I didn't order save the children here for $22 and they they and they look at the poor children they've all flashed on those poor Starving Children I can't believe that most of them aren't still paying that $22 Mr Wallace I I would if somebody did this to me and say look give dog on it but what about the cops about Danny well they were not amused by the jail house Shopping Network I think Danny Ferris is a convicted killer and a con man nothing more Lieutenant Ross Hughes and fellow officer R ubetta of the Metro Dade Police spent months building a case against fairies and they knew he had confessed to murdering a friend while under the influence of cocaine he's already in jail for murder possibly facing the electric chair so the fell had no fear of any reprisal for what he was for the fraud that he was doing so he engaged in what is called the jail house Shopping Network and he was very successful Enterprise and he was very comfortable in that role and he would remain comfortably in business because Hughes and yetta's case against him was eventually dropped by the D State's Attorney why insufficient credible evidence the state's attorney said the two Metro investigators continue to warn jail officials about Ferry's continued phone access but jail officials said it would violate Danny's rights to take his phone away he is allowed access to a telephone in order to steal he is allowed access to a telephone well I know but you you know perfectly well he was stealing I mean this must have been a matter of some frustration to you guys who've been after him now according to this for a year or two and you're getting no place with it anytime investig doesn't come to a a proper conclusion for the investigator it's frustrating so listen you told the correction Personnel go in there and take the phone out of the cell what' they tell you if I recall the memo right that uh he couldn't do that jail officials finally did search fairy cell seizing hundreds of credit card numbers but that didn't put him out of business because he still had a telephone and one hidden credit card number and I had written this on the bottom of my bunk and it was a woman's card though it was Regina Donovan was the name and but it was a good number I said well here we go we got to we got to do something so fairy use the credit card number to pay for a newspaper ad and a telephone answering service and I ran an ad in USA Today saying cosmetic package $89.95 value for only $1 19.95 uh all major credit cards accepted please call and Regina Donovan Cosmetics on 1800 number but Danny never intended to sell any Cosmetics all he was after was a fresh batch of credit card numbers well the girls there they're they take the orders and they write down they thank you for calling Regina Donovan may I help you yes we saw your oh yes uh may we have what credit card will we be using today they wrote the number the expiration and then at the end of the day I would call and they'd have all these numbers it was incredible and so I just got a whole new stack of numbers and I was off you could call them up any time of the day or night and uh he was uh he was working around the clock particularly when I was interviewing him Pete is a freelance writer in Miami who is writing a book about Danny feris and his jail house Shopping Network the operation uh was working in as many as 40 States uh there were as many as uh 150 drop sites uh dozens of employees um $750,000 documented in stolen goods perhaps up to2 to4 million and that was just during an 11-month window as of his captivity and you got this mostly from the Secret Service I got all of that from the Secret Service that's right the Secret Service in addition to protecting the president and going after counterfeits they also work credit card fraud cases and they began to investigate the jailhouse Shopping Network too they searched Danny's cell twice and They confiscated over a thousand stolen credit card numbers and cataloges but Danny still had access to a telephone and he still did business just as he had for nearly four years even on my on my cell door at ICD in D County I had a MasterCard and a Visa logo on the outside of my door it was pretty wide open so everybody knew what you were doing and you kept on doing it was incredible I don't I just say I I don't get it why would they give you access to a phone if they knew what you were doing I give great phone I'm quite serious why would they keep letting you have access to a telephone I I don't know I would I of course every time that they would say if you don't stop this you're we're going to take your phone away I said okay then I won't do it anymore but Danny knew that he had a legal right to phone privileges while awaiting trial so he was able to go on stealing hundreds of thousands of dollars in merchandise here we go we wanted to find out more for ourselves about telephone access for the inmates at the Dade County jail so we went there to take a look there's a guy on the phone right there and nothing had changed we visited Danny's old sale this was the office that Danny F's worked out of yes sir not much bigger than somebody's bathroom we were amazed to find a list of telephone numbers on Danny's old cell wall so we called one LL Bean order Department can I order some merchandise this way and I can order how much can I order a 100 or a th000 or $10,000 worth of stuff no limit my name is uh Mike Wallace and I work for 60 minutes and I'm sitting in a cell LL Bean hadn't heard about the jailhouse Shopping Network but they did say that credit card fraud is a problem for them and LLB had received an order from one Tommy Chapel the inmate who inherited Danny's old cell explain something I go into your cell and suddenly I see on the wall all the Danny's numbers are those Danny's numbers it turns out that Tommy Chapel was only one of many inmates who had learned how to use the jail house Shopping Network courtesy of Danny fer they don't even have to be terribly intelligent and and only marginally capable it's it's not it doesn't it's like a train Mr Wallace I feel like I constructed a train and just darn near anybody can drive a train heck it's on a track all you got to do is put the fuel in credit card numbers and this train will go but Tommy wasn't about to acknowledge to us that he had graduated from the Danny Ferry's College of credit card manipulation you've never done any of this no raise your hand since Tommy Chapel wasn't going to confess we asked Sergeant Ted Tate of the Metro Dade Credit Card Squad what was going on what is going on at the Dade County Jail Sergeant Tate level with me it's still going on yes sir it is in Dade County yes sir it is in ICDC over telephones with credit cards it's it's going on in the day County Jail system yes sir how come I don't I don't know the answer to that well surely Lonnie Lawrence the director of Dade County Corrections the man who requested a sec service search of Danny Ferry's cell he could explain why the jailhouse Shopping Network was still alive and well there are legal guidelines that say that we shall provide phone access to to inmates inside the cell yes they don't care where you provide it as long as you provide it but what about inmates who abuse the phone system for instance let's say he's threatening the judge who put him away on the phone we still have the ability to do that you can take that phone away we take the phone away so you can actually take phone privileges away what you have not been ble to do is to take phone privileges away from guys who were in jail and scamming well over the phone well I think that we've been able to restrict their phone privileges I went into Danny Ferris old cell this morning mhm 3 hours ago right right there is the telephone right there on the wall it's a list of 1 1800 numbers and credit card numbers MH I called LL Bean they were taken my order I was playing Danny Ferris right over again slick as it could be well you know we don't we don't have an imper a perfect system and nobody knows that better than Danny feries he was finally sentenced to five years for credit card fraud on top of an earlier life term for murder and he was moved to the Charlotte Correctional Institution a much tougher Florida State Prison where with prison guards looking on we met a Chason Danny feries he told us the prison officials here have made sure he can no longer practice his trade I would like to be very clear I don't want to them perish the thought that they might think I'm still wielding my telephonic sword you know what I mean I can't do that why not here in the state prisons it's a much more they're much more sophisticated the state prisons are more sophisticated yes in there the way that so what you're saying is you're going straight perforce now now at Charlotte Correctional Center yeah well just yeah are having to go in a New Direction because that the you well I mean come on I'm not just going to roll over Mr Wallace isn't there a lady in Fort Lauderdale you've been talking to I don't know who who you didn't you offer to set her up in business and WR an apartment from her as a drop site oh I'm sure that I probably did I recently now see you would get a fell in trouble with all these folks standing around us here I come on I mean you're you just professed innocence you don't do it anymore that's what you just told me Daddy I I know well you know here's what I've got somehow you're in touch with a lady in Fort lutale renting an apartment which is going to be a drop site where you are ordering or she is ordering or somebody is ordering cam quarters and things like this as he nervously takes a drink of his root beer I mean you're a crook well and a murderer that's what they say dog gone I wish they didn't say that though Danny feras has been moved to yet another Florida State Prison and he's been told that he'll be isolated from his fellow inmates if he ever abuses the telep phone privilege again and Dade County Jail officials say they now have new procedures for inmate phones after we went down there to report this story those inside jail cell telephones were removed buy yourself a lottery ticket and no matter how high your hopes of hitting the jackpot the odds against it are even higher but suppose someone promised that you could sweeten the odds by buying shares in pools of tickets from various lotteries around the world well that's exactly what authorities say that a con man name of Blair down did operating out of Canada Down's Army of telephone solicitors 500 of them working in shifts targeted mostly elderly Americans because they were lonely and susceptible to anyone with a kind word so all told down con them out of an estimated 200 million to $300 million in one of the biggest telemarketing scams in history everything's fine okay Irene Taylor a widow from Tyler Texas says a woman from down Syndicate name of Sharon became one of her best friends calling her constantly promising she'd win a fortune if she would just send the money to invest in shares of foreign lottery tickets from Spain and Australia she would talk about my family and her family she'd say now won't it be nice if you win money to help them help your children do something since you do not have money now that your your husband's not there what would you send the money or checks or well I sent checks at first but then they got where they wanted Mastercard or VISA so they could get their money immediately you gave them your credit card number yes and and what kind of made me get suspicious was uh I got to be build for some that I did not tell them to build me for and I would call Sharon and she'd say well I'll have it taken right off well they would take it off but maybe been two days then it was put back on and I got three or $4,000 done that way even so for nearly eight years Mrs Taylor kept sending money to Sharon about $115,000 in all without ever getting a dime in winnings and not even one lottery ticket to show for it so see I U I'm a sucker for some things Mike Sergeant Don Smith runs the vice and gambling unit for the Vancouver Canada Police Department he says the victims were told that if they bought bought shares in foreign lottery tickets not just a single ticket they would win a fortune but Smith says no fortunes ever came their way and the buyers never even received proof that any lottery tickets were actually purchased when people were ready to quit Sergeant Smith says down Syndicate lied to them saying they were winners but could collect their jackpot only if they sent in more money and Incredibly a lot of people did we've had victims arrive in Vancouver they're convinced that they've won millions of dollars they've hopped on the first plane available they arrive in Vancouver hoping to go to this address only to realize all of a sudden they're showing up in front of a post office box and nobody knows the location of the company hi Ray 81-year-old Ray corck a nursing home Resident was another down victim down Syndicate had taken him for $40,000 by the time he taped a down salesman trying to get even more money from him by calling him Dad I'm not dealing with you as a third person you're my dad anyways I don't have a dad and I treat you as a dad dad you have your you had your life I tell you what I'm so disappointed that I ever you're not because if you if you do your part properly you know you will get your winnings but you didn't do your part properly that's the problem oh my God am I ever in trouble and I wish you a good my sons ever found out what how much money I gave you they would never forgive me I wish you the good good luck and God bless you Dad I'm going to probably even get sick over this now what kind of credit card do you have that's what makes it so despicable is that they uh they they purposely go out of their way to develop a sucker list of elderly people and uh they take great sport in in trying to buil him out of as much money as possible and this is James Blair Down The Man Behind so much misery a Canadian down built his telemarketing Empire with the names of elderly Americans potential suckers that he bought from companies that compile such lists for advertisers and salesmen as seen in this undercover video Don was living well with a taste that ran to racehorses and foreign bank accounts and the $17 million mansion He bought on beachfront property in Barbados so why didn't Canadian authorities stop lay down Sergeant Smith says Canada lacked the incentive to really go after down who lived in Vancouver because his victims were Americans only but in America as Down's victims grew into the hundreds of thousands authorities were feeling the heat Katrina flammer the US attorney in Seattle had been pursuing Blair down for years so we asked Miss flammer why stopping down was so difficult it takes time and commitment to start processes in different foreign countries here we were dealing with Canada we were dealing with Barbados we were dealing with Switzerland we were dealing with the Cayman Islands we were dealing with the Channel Islands you're mentioning all of those places because that's where he' stashed his money correct eventually down tired of all those us investigators trying to Corner him so he engineered what his critics say was his biggest con of all this time they say his victim was the US government in a deal negotiated with the US attorney in Seattle Dan agreed to serve 180 days in jail in the United United States and to pay back $ 12.4 million of the hundreds of millions that he had allegedly taken from elderly Americans that was chump change to him given the money that he had secreted away in offshore accounts and other Investments do you know what happened to Blair down some time in jail 6 months slap on the wrist The Story Goes that he's made a profit of something like $200 million pretty good of other people's money anything at all to say to the people to the elderly people who lost some of their life savings don't want to talk the camera don't down declined our repeated efforts to talk to him miss flammer the US attorney in Seattle says that Downs plea bargain was the best deal possible for everyone involved that's a result I think we should all be happy with overall one hears that perhaps he got away with 200 million maybe $300 million right I wouldn't presume to put a number on that why not because what we proved what was that uh the $ 122.5 million which we seized was the result of international uh telemarketing and marketing of Lottery shares that's what we proved that's what he pled guilty to and that's the money that we seized and paid back to the victims and that's what you're ashamed of that you only able to get 12.5 million when people talk about 2 or 300 million from Americans I'm not at all ashamed of what we've done us attorney flammer doesn't believe that Dan will walk away with $200 million because of expenses he incurred running his telemarketing Empire but Sergeant Smith disagrees we believe that his Ventures netted him at least 200 $210 million netted him after expenses yes cuz I talked to the US attorney in Seattle and and she suggested that that was way out of line well that's one of the one of the problems you have or areas of concerned when you have different uh agencies uh participating in an investigation as to everybody has a small piece of the uh the picture as opposed to the larger picture in his entirety it sounds like a good deal in other words okay I'll Take 6 months you can have 12.3 million get off my back that's it and I think he when he agreed to that deal H he felt that was probably going to be the end of his problems but to down surprise it wasn't on his second day behind bars he learned that someone somehow had managed to find and to freeze tens of millions of dollars of his assets that were stashed around the world and that person wasn't anyone from the US government it was Martin Kenny a Canadian citizen who runs a company out of Dublin Ireland called interclaim you never lost any money to Blair down no never tried to scam you no never been personally victimized by him absolutely not so what is inter claims and Martin Kenny's interest in Blair down the best way to define interclaim is to say that we seek to recover the fruits of economic crime in partnership with the victims it's a special new company um uh we don't think there's another one like it anywhere in the world and as far as we can determine there isn't Martin Kenny and his backers have already spent more than $2 million betting that they can do what the government did not forced Blair down to return more than $100 million they say that he took from elderly US citizens if successful and down is challenging their actions in a Canadian court if successful interclaim will split down the middle with Down's victims whatever money they recover but first Martin Kenny had to find Down's assets so when Blair Down's brother and sister-in-law who were suspected of hiding Down's riches a charge they've denied when they embarked on a Christmas cruise from Santiago Chile to Buenos Iris inter claims undercover spies were right there with them we arranged with the captain of the vessel to sit at table with them to befriend them throughout the duration of the trip Tim down Blair's brother spent about $70,000 on the trip lost $40,000 in gambling on the vessel and then invited our operatives to Calgary to get to know them more and to whine and dine them in their restaurant called Chow Baby meanwhile before down went to jail interclaim agents were following and covertly videotaping him at family dinners at business meetings even at this strip club then with the details of what they say were Down's ill-gotten gains in claim secretly convinced a court in Vancouver to freeze $100 million in Down's assets including 27 commercial buildings in Calgary owned by his brother and sister-in-law inter claims goal forced down into bankruptcy so that his assets could be liquidated and given to his victims he didn't know that you guys were going after him he did not know that many courts eight courts in seven countries had given us the most extraordinary of relief that unlocked the secrets to how he had laundered the proceeds of his crime and where that wealth sat what' you think when you first heard what interclaim had done to blur down I was happy the only way you can slow these people down is you have to hurt them financially and he stands at the chance of of losing everything that makes me very happy not so happy was the down family lawyer who called inter claim quote an international commercial terrorist who practices extortion and what did the US attorney in Seattle think of inter claim's action interclaim grabbed commercial buildings in Alberta they got a$ 17.5 million home in coov Spring Barbados they got access to his telephone accounting real estate and lawyers records around the world and court orders issued in Vancouver froze Down's bank accounts along with hundreds of thousands of dollars in the trust accounts of Down's lawyers interclaim hasn't been awarded those damages they have Simply frozen assets preliminary to litigation that may go on for years Miss flammer says the important thing is that everyone who lost a lot of money has gotten all of it back thanks to her office but Martin Kenny says that simply is not so all I know is that we estimate there are about a million victims out there and only 4 1880 people have received any kind of compensation to date and Kenny says the US government had no way of identifying all of Down's victims because the US government did not have access to all of down sucker lists you know the US attorney told us yesterday that there was nobody out there as far as she knew who lost a lot of money who got nothing back but you're one of the people well I didn't get nothing back and you lost a lot of money well to me it's a lot of money it may not be to some people this past summer while Irene Taylor was still trying to get her $155,000 back James Blair down walked out of this Seattle jail after 180 days behind bars having paid his debt to society he is now a free man last August a Canadian judge ruled that interclaim had no legal standing in this case but the judge obviously sympathetic to the victims virtually invited an appeal interclaim the judge wrote offers the most realistic opportunity for the compensation claims of the victims and Inter claim is in fact appealing meantime the bulk of Down's assets remain Frozen
