In New York, Former HSBC Vice President Pleads Guilty In Massive Telemarketing Fraud

MICHAEL J. GARCIA, the United States Attorney for the Southern District of New York, and MARTIN FICKE, the Special Agentin- Charge of the New York Office of the Department of Homeland Security’s U.S. Immigration and Customs Enforcement (ICE), announced that RAYMOND PAYNE, a former Vice President with HSBC Bank (“HSBC” or the “Bank”), pleaded guilty in Manhattan federal court to conspiracy to commit wire fraud and mail fraud in connection with his participation in a massive telemarketing fraud scheme conducted out of Montreal, Canada that targeted tens of thousands of victims in the United States between early 2002 and late 2003.

According to a superseding indictment against PAYNE and co-defendants LESLIE PINSKY and STEPHEN CLARK, earlier criminal complaints in the case, and PAYNE’s statements in his guilty plea, PAYNE was a Vice President of HSBC who worked out of the Bank’s corporate offices in Manhattan. PAYNE served as the relationship manager (or account representative) on an HSBC account held by a telemarketing company in Montreal called First Choice Tele-Services Corporation (First Choice).

According to the charges, PINSKY and CLARK ran First Choice, which employed telemarketers who made unsolicited or “coldcalls” to low-income U.S. residents with poor credit. In these calls, First Choice telemarketers offered U.S. residents “guaranteed” credit cards for a fee that ranged from $249 to $299. First Choice telemarketers working for PINSKY and CLARK also obtained the victims’ bank account information, which First Choice in turn used to initiate automatic transfers of funds from the victims’ bank accounts to First Choice’s account at HSBC.

According to the charges, although some of the victims of the scheme did receive a manual on how to repair their bad credit, none of the victims received a credit card from First Choice. Approximately $30 million in fraudulent proceeds from this scheme was run through First Choice’s HSBC account, and the scheme victimized an estimated 100,000 victims in the U.S.