The Fight Against Crime: Notes From the Front : Con Games Keep Mail Unit Busy

It seems unlikely that junk bond king Michael Milken, hotel queen Leona Helmsley and crooked televangelist Jim Bakker would have anything in common, but they do: all were busted for using the U. S. mail to further illegal ventures.

The U. S. Postal Inspection Service is involved in many of the major criminal cases that make headlines in Southern California and across the country. Any fraudulent scheme that involves the use of the mail, fax or telephone falls within its jurisdiction, said Pamela Prince, a postal inspector based in Pasadena.

“It’s not only the pieces of mail used in a fraudulent scheme, but even if they cause the mail to be used in the scheme, then each piece of mail is viewed as mail fraud,” Prince said.

Helmsley used the mail to send fraudulent tax forms to state and federal authorities. Milken filed false information with the Securities and Exchange Commission via the mail. And Bakker offered his followers nonexistent investment opportunities in a resort hotel.

Of the 145 inspectors in the Los Angeles division of the Postal Inspection Service, about 25 are assigned to the San Fernando Valley, where armed robberies of postal carriers and postal vehicle break-ins are the most popular crimes, Prince said.

Postal inspectors could keep busy with simple mail thefts--a record 560 from mail trucks and 139 from letter carriers or post offices in Los Angeles during 1994--but are deeply involved fighting sophisticated con games.

The lottery scam--in which a consumer is told they must send in a claim fee to collect their winnings--is one of the most common, Prince said.

“It is illegal to charge a fee to claim a prize,” Prince points out. “And usually the prizes are undervalued.”

Nonetheless, there are always people who believe that they can get something for nothing, and these are the individuals artists can cheat, Prince said.

“People will send thousands of dollars through the mail to a complete stranger,” Prince said.

Don David Wilson, 60, a self-proclaimed franchise expert, operated his scam under the name Great American Service Merchandising and later under the name Pop America.

He offered his numerous elderly clients--many of whom were Valley residents--the opportunity to pad their fixed retirement incomes by purchasing “exclusive franchise” rights to sell “impulse” purchase items found on display racks near checkout counters at various retail outlets, Prince said.

A franchise cost about $28,500 and Wilson, who passed himself off as an attorney, guaranteed there would be no competition in their designated areas. But when the merchandise arrived, Wilson’s victims found that most of the products--cheap pencils, kiddie jewelry, self-help tapes, even solar-powered barbecues--held little impulse appeal, Prince said.

Wilson was sentenced in December to 52 months in prison, three years’ probation, and ordered to pay $10,000 restitution. He was also prohibited from ever offering franchise deals again--legitimate or otherwise.

Los Angeles postal inspectors announced last September the arrests of two Russian immigrants who ran what U. S. attorneys called the largest health-care scam ever prosecuted.

Michael J. Smushkevich and Bogich Jovovich were sentenced to a minimum of 20 years in prison after they were convicted on multiple counts of mail and wire fraud as well as federal racketeering laws, Prince said. They were ordered to make restitution of more than $100 million each.

Smushkevich and Jovovich operated a network of health clinics and mobile medical testing vans that offered free examinations to people whose insurers allowed them to choose their own doctors, investigators said.

Then they were given batteries of tests that were justified to insurers with fraudulent medical forms describing nonexistent ailments, while real medical problems, such as AIDS or cancer signs, were sometimes overlooked, investigators said.

Over a 10-year period, the operation generated more than $1 billion in payments from health insurance companies, employee benefit plans and more than 800 government programs.