Canadian Scammers Cashing In On Seniors

Tens of thousands of U.S. seniors lose their life savings each year thanks to sophisticated telemarketing scams. As CBS News chief investigative correspondent Armen Keteyian reports, it's a $40 billion criminal enterprise that's booming in the Caribbean, Costa Rica and Canada.

Captured on wiretap recordings are the voices of Canadian con artists scamming unsuspecting seniors in the United States out of billions of dollars each year.

"You were selected for the top spot in the $10,000 category."
"You have to go down and make the transaction of $2,800."
"Why don't' we just go the minimum, $1,000 right now."

Sergeant Yves LeBlanc, of the Royal Canadian Mounted Police, heads up Project Colt, a telemarketing fraud task force.

"You actually hear some of the messages, the desperation in the victims who are asking for their money, because they've just sent their life savings," he says.

"I don't have a penny. They stripped me down to nothing," says one victim.

Keteyian went inside these scams in Montreal -- where insiders say there may be as many as 800 to 1,000 boiler rooms, each one generating up to $250,000 a week.

The victims are told they've won big money. But to collect, they must first send thousands of dollars as payment for taxes, insurance, or delivery fees.

Here's an example of how they sometimes bully victims: "You know what, you're driving me nuts, what's wrong with you?"

"She said that I had won this 'X' amount of money, you know. And, of course, that was very interesting," says Joseph Heine.

Heine, 88, a former breeder of prize show dogs, wired a total of $190,000 to a series of Canadian callers -- payment for taxes, he believed, on his winnings.

"When someone takes away your whole life savings, you feel very depressed and you feel very angry," he said.

A Montreal con man, who asked to be called "Zach," says there's even a name for the game: mooch hunting - those easy targets who can't say no.

"So that's the pot of gold for you guys?" asks Keteyian.

Zach: Basically, but I don't do those.

Keteyian: Oh, come on, Zach. That's when the conscience kicks in right there? When you're going to hit a home run?

Zach: No. Mooch hunting, well, that's easy. But I like to play a little bit, you know.

That's what a group of con men, busted late last year by Leblanc's team, were doing. Keteyian visited a boiler room recently taken down by the police.

The victims were told to send cash in the mail, often in the most unorthodox ways.

"So here is a magazine sent from the U.S., somewhere in Houston, Texas, that is full of cash, hundred dollar bills. It's unbelievable," Keteyian says flipping through the magazine.

The con artist, Zach, blames it the people who own the boiler rooms.

Keteyian: You're stealing money out of people's accounts -- their life savings.

Zach: I basically don't think of it as myself stealing it. I'm just doing it for a room owner. They're stealing it.

Keteyian: For a room owner?

Zach: A room owner. They're stealing it.

Keteyian: So that's how you rationalize this? You're doing it for a room owner?

Zach: There are times when it's tough to sleep at night, it's true.

That's little consolation for Heine, who sold stocks to lay claim to winnings that never came.

"Right now, the way things are, I would not trust anyone," he said.

But all over America, the phones keep ringing.

• AARP Scam Alert: Misplaced Trust


• FTC: Cross-Border Telemarketing Scam Targets Elderly Americans


• FTC: Telemarketing Scams


• FBI: Fraud Target - Senior Citizens