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Telemarketer arrested by U.S. federal agents

03/07/2012 12:19 EST | Updated 05/07/2012 05:12 EDT

U.S. federal agents have arrested a telemarketer who once ran a government-supported call centre operation in Newfoundland.

The Department of Homeland Security says in court documents that it has been investigating Michael Mouyal “for running an international telemarketing scheme,” and committing mail fraud, wire fraud and money laundering.

Details of the allegations against Mouyal are found in an affidavit filed by U.S. Department of Homeland Security agent Carlos Bencomo, in support of one count of wire fraud.

The allegations against Mouyal have not been proven in court.

In 2007, a Quebec judge banned Mouyal from telemarketing business directories for 10 years, and hit him with a $1-million fine for running a scam from several locations in Canada, including St. John’s.

Mouyal got federal job grants and approval for a provincial tax break program in 1999 to set up an operation in Newfoundland.

Last month, NBC Miami reported that Mouyal was back in business — this time in Florida. CBC News helped the U.S. network affiliate with its probe.

According to Department of Homeland Security court filings, Mouyal and his wife made arrangements to flee the country after those reports aired.

More than $20 million “flowed through” accounts associated with the couple between 2008 and 2011, the documents note.

Offshore call centres

U.S. law-enforcement authorities allege that Mouyal used offshore call centres, including two in the Dominican Republic, to call Americans and attempt to obtain their banking information under false pretences.

Telemarketers posed as Internal Revenue Service (IRS) agents and claimed they needed the information to issue a tax refund, according to court documents.

Mouyal's call centres then used this information to target businesses – often small, Hispanic-owned restaurants – and used “a variety of ruses” to sell services.

U.S. federal agents relied on at least three confidential informants in conducting their probe, according to the court affidavit. Mouyal used the alias “Michael Cohen” to prevent employees from learning of his previous telemarketing fraud conviction in Canada.

Canadian conviction

Back in 2000, Canada’s Competition Bureau, aided by local police, raided Mouyal call centres in St. John’s, Toronto and Montreal. The Newfoundland location shut down shortly after.

Mouyal and a number of his senior executives were charged and later convicted of deceptive telemarketing.

Companies associated with the telemarketer generated gross sales of $136.8 million between 1994 and 2001. Mouyal personally pulled down more than $2.8 million in earnings from 1995 to 2000.

Mouyal admitted to "exercising control, direction and management over all aspects of the business operations," Quebec Court judge Elizabeth Corte wrote in her 2007 sentencing decision.

Corte sentenced Mouyal to community service and fined him $1 million for running the scam. The judge also slapped him with a 10-year order that prohibited him from selling business directories or commercial supplies.

The Crown had unsuccessfully asked for a three-year jail term.

Government support

Ottawa approved a cash contribution of $287,000 in 1999 to help Mouyal open his St. John’s boiler room.

The Newfoundland call centre also received so-called EDGE status from the province, which qualified Mouyal for a series of tax breaks. The province says Mouyal never took advantage of those benefits.

Mouyal’s businesses operated under a number of names at the time, including Merchant Transaction Supplies, Merchant Supply Services and International Business Directories.

A series of critical media reports at the time found questionable sales practices and a trail of businesses that said they were victimized by Mouyal telemarketers.

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