can you explain what are the different responsibilities between the interim government that the national transitional council? to work with freedom house where watchdog human rights organization but we also do civil society programming so i would also like to hear from you. what kind of training do you see is needed for organizations planning to come to libya so we can help out in the development of the civil society? thank you. >> concerning russia, we wish that russia would have felt was going on who during the eight

months of the evolution. did they see what was happening? i don't know. noisette okay if they saw what was happening but never cared to? i would say never cared isn't necessarily the proper word, but whether they had the political agenda that served their own objectives in this world like to say they have the right to. we are happy with how russia handled the situation in what respect foley, no three dewey welcome russia to come back and

work on projects? yes, as long as they don't serve the past regime and have no connections with it. do we honor contracts with? yes no but they have to be legal and we have to make sure that corruption wasn't a major part of it. i hope that answers your question. so yeah, by all means. we want to be a force in this world in a small way based on our size, but i tell you this was not easy and the hope our friends realize it, so yeah you are welcome to come back. keep in in mind we don't want the past regime anymore and we

are not going to take it anymore. and we don't want to even smell it anymore. some, but you have to and i guarantee we honor our contract. the minorities, you know, i lived and have of my life in tripoli, and in fact that is where i was born. and next door we have maybe one block from where i was born and raised was a catholic church, and we had an entire community around us and never felt there was a problem, you know?

we communicated and i spoke a little bit of italian, you know. and two blocks, and i remember exactly where from where i lived -- [laughter] two blocks this way, two blocks that way we had a synagogue. just across from my house we had a jewish family living there were. i remember the name of of a friend who was my age. said there wasn't a problem. what causes problems is a hidden agenda, i had a hidden agenda he didn't want to work with me.

want to be transparent, clear and work together and that is the case and that is typical and the staccato. if we get to that point the world will be a fantastic place. first of all i'm a firm believer that they don't come and maybe this is wrong, i don't know. i do not ask somebody to serve on my government just because he is in this group for that group he. it is all over libya. the taboo, but everyone to call it what, but it so happens that

we now have one, and i tell you this sincerely, we have to lease on our kevin at come strong, capable and they're doing a good job, one of them is and of the same team to work together. another one is the head minister with the toughest job in libya and has to [inaudible] and i why did not know served as the undersecretary and then he became [inaudible] finally i found out that.

i live in a place where people from different origins and backgrounds were there but we never asked each other where are you from? okay? and when i came here to the states i felt the same way. i served with another group of minority activities and things like that. but in libya -- the regime create some meese things. it never existed as far as that. so, i guarantee you this is going to be a different libya. transparency behalf women and ladies here in libya would that are so proud of. this is a difficult question i can't answer all of it but that's part.

in terms of transparency if nothing else fighting corruption and transparency to things we want to make sure of some that they exist. so we have been doing whatever we can. anybody can look into them. legitimate groups can look into them. we have spoken today to the world bank and we want to see how we can clear even more transparency. we would be also looking into the government concept sending someone higher level in the upcoming conference in brazil, but we are very serious about this. corruption has been -- libya was up there in that scale, you know, we don't want that to happen again. so we are working very hard.

now, this is to -- she raised as mentioned that we are not in the media telling people what they are doing, and yes indeed this is a problem, it's a mistake. it's a mistake but it's just natural. most of us are just democrats. we never cared to be in the media. i feel like if i do that too much people would probably just say all the time enough when he fahey and was articulately and would be an outspoken in his

will see and hear more once we do. that is the legislative and we are the executive who. there is of course some interactions, but. >> thank you. i'm afraid this is all the time we have. we would ask to stay in your seat until the prime minister leaves and then join me in the thinking of the prime minister for the remarks and wishing you all the best. [applause]

[inaudible conversations] [inaudible conversations]

[inaudible conversations] there were a couple of instances when the german submarines were approaching fishing boats and

saying we will take your catch and fresh food so he says will wait for them to come alongside and then my highlight players are going to launch hand grenades down the open hatches and the other members of the crew are going to machine guns the germans on deck. on this morning's washington journal we talked to ellen tauscher about current events in the middle east and putting on reston's ury at and iran's nuclear program. she's a former member of conagra's and a former undersecretary of state for arms control this is 45 minutes. the events in the middle east is ellen tauscher, the chief of former undersecretary of state for arms control and international security from

california to 1997 to 2009 and which was in part of the armed services committee and she is currently a member of the atlantic council board of directors. welcome. >> thank you. good to see you. if you take a look at what is going on and syria as you see right now what is the best strategy as far as the united states going forward the president has made it very clear in his outrage attacking his own citizens, and this has been going on for well over a year. the president has led an international effort with the members of the administration and will a very important coalition, and you have very important voices in the region, like the arab league. very much united so what you have is a syria that is attacking its own people and the president has to leave and a transition that has to go forward so diplomacy is important to get this political transition form of, support for the national council, and the

efforts of the arab league are important and i think you have an isolated syria that sees that there are very few options left but clearly military intervention is the last option everything is on the table for the president that right now this is but the policy and transition to an estimate aside from that and taking a look at what is going on inside, your thoughts on arming rebels within syria. >> i think it's very important we do everything we can to support those that are going to be leading a free syria in the future and there are many different mechanisms and very different capabilities to do that. i think that many people have spoken out in the last weeks and months about arming people. it's always dangerous when you consider the fact that harming people leads to the kinds conflict that you have but when you see what has been going on in the streets of syria and when

you see the syrian military that choose not to fire on their own people shot by their own colleagues you see people crying because their parents are dead. it's important to understand that we need to moderate and syria's approach to this and i think that all things are on that your right now we are depending upon diplomacy to lead to a political transition, and the idea of arming people is on the table but it's not something that is operational right now. >> when does diplomacy turn to something else? >> i think it is turning to something else. it is not to lead his people but to tell them and so that is why he is going to have to go and i think devotee has made that very clear. how do you make that transition without further exacerbating an already tense situation where to many people losing their lives every day? so i think that is a decision that the international community has to make. certainly in the region it's important to see what the other

members are the of the region are sick and especially the arab league but it's also important to listen to the syrian national council on what to devotees their looking for and how do we support them. it's important to also look at these humanitarian issues. it got lebanon, jordan and turkey that have a tremendous amount of refugees. if there was a bigger armed conflict i think this would be a bigger humanitarian crisis on the region's summer think there's a lot of elements to put in place before you look at any other kind of intervention. but right now it's important to really have a fourth full diplomatic mission commander, that message to get a political transition. >> when it comes to the region where do they factor and that? >> i think that is important, too. the turks and tunisian as we've learned a lot of lessons ofin te lessons about transition. those are important voices and listening to them. >> our guest with us until 8:30

to talk about the middle east issues if you to ask a question, (202)737-0001 for democrats. (202)737-0002 for republicans and (202)726-0805 and an e-mail can be set at journal shoutmac c-span.org and we can take your tweets at c-spanwj. carl, a democrat, hello. >> caller: good morning. ms. tauscher, let's talk about international law, and most of the people in my administration it's been my experience democrat and republican tend to view international law as kind of a dirty phrase. where are the signatory to the u.n. charter? we drafted most of it and the u.n. charter as i am stand spells of the sovereign nation and one ... to suppress the armed rebellion in their own

nation hopefully they do it humanely. look at nations like bahrain. there is a rebellion there but we kept those out of that. there was one ayaan -- in yemen and we supported them but not the people which is of course al qaeda to get the point being that we as a double standard. we are not happy with syria politically because you feel that they support hezbollah a little bit, but you also forget that syria was with us after 9/11 sharing intelligence, helping work with us. >> we will leave it there and the guest response. >> guest: we have respect for the domestic and international law but frankly that is in the point. this isn't about picking winners and losers. look at the region. the region is unassailable lead against president. the on the country's standing

with assad is its friend iran and this is a country that is trying not to suppress its civil insurrection but it is killing innocent people. these are not people that were taking up against the government. these are people going to the market. so i think that while the caller is right that the international law is the rule that we try to live by we are not picking winners and losers here. the president is picking losers and it is his own people and that is what is important here is that the region, the people that know this area the best are against this regime and the president and for the syrian people who i think we should all before and this isn't just any country, this is a country of iran, and one that has unabashedly supported both hamas and hezbollah who are significant terrorist organizations in the region. so i think it's important to recognize that we are not picking winners and losers in

that is his own people. >> you were asked by michelle on twitter aren't the hands tied until china and russia joined in? >> guest: i think that there's a lot of effort going on in this administration. i know that the ambassador is working with the current members of the security council on a new security council resolution and what was involved in other members but i think it's important that we go back to the u.n. and try to get something through and of course especially in china permanent members are important and we are consulting with them and i know cicatrix clinton talked to minister lavrov. those are detailed and i think it's important that we let those details it worked out of new york but i think it's important to note that all levers of power and influence are being used including the security council. >> host: what makes you think that they have raceway on this and including syria? >> guest: to vote by the

general assembly, and i think that while we are deeply discouraged and not happy with the vote in early february and the veto by russia and china of the security council resolution, those things have a chance of coming back and that is what we are working on now. >> host: florida, good morning to mike. independent line for the guest. >> caller: a few points here so please don't cut me off. you keep talking i've heard you make never multiple references to the international and that sounds like it is nearing the state and secretary leon panetta stating in the last couple of days now he's more concerned with getting the u.s. approval than getting the okay from congress which leads me into the mess that we have in libya but i'm sure you are aware now that we are working fighting with al qaeda and libya or we were during that conflict. i'm sure they are still there.

so i am a little concerned with the one country we have a nanny we are fighting in another country we are friends or allies and this is one big scam but further my main thing is i really wish everyone would have been vocal when these things are happening in ugonda and the democratic republic of congo and where hundreds of thousands even millions of people are being slaughtered and no one said anything i don't know if it is because they were black people this was happening to and they didn't have oil and we've already successfully put in the dictators and the ruthless rulers and their little and they run the show so we don't need to have this international pressure that we put on these muslim countries. >> guest: my reference to the question previous to you which is about international law but make it clear that we have stated our position they are

very clear in the case of syria, president assad has to go. his punishment and killing of his own people who are just looking to have freedom both religious freedom and economic freedom is by him and this is the chance to keep power from him and i think in every case but you have to do is look at the region. what is going on in the region. we are not from these regions that we have tremendous influence and tremendous economic influence and a lot of friends and allies in the regions. specific to the middle east, the arab league who unfortunately sat on the sidelines and other conflicts became active during the arab spring and made choices in libya for international help to put down mr. ghadaffi and dave to get a summer position. i think in many of the cases as you mentioned some of the

terrible trouble with africa, once again, it's about the region is doing, and the region is disorganized they don't have any advocates, they don't have any way or mechanism to create international influence that is a very bad situation and that was true in many ways of africa that is not true in the middle east and we know how volatile the middle east is and how close everyone is there. it's very important that these situations be contained and maintained and people get to speak their own voice and have an opportunity for the representative government and that is the opportunity that we want for the syrian people. >> host: is the difference between the actions taken in libya and actions to be taken in syria, and are there comparisons between the two? >> guest: i think it's partly an overused phrase the case by case basis is an important way to look at things. all of these countries in the region are somewhat homogenize are not. the at various different forms

of coverage and various histories and various relationships with each other and the certainly of different relationships with us and the more colonies of the european countries of the have a different relationship with the e.u. and other european allies, so in every case it is you can't just put one template across the whole region and say this is how we are going to manager. >> host: but they are supporting the rebels then. >> guest: these are decisions that are made. your trouble is my freedom fighter. someone who the regime thinks is an insurgent could actually be the freedom fighter. so i think once again these are calculated assessments that have to be made. and in the end, the american people tend to come down on innocent people, come down on their side to make sure that we are supporting them and i certainly think that is a case in syria. >> host: virginia, go ahead, a republican line.

>> caller: thank you for c-span. we appreciate these programs and comments. on what like to ask the former undersecretary that our government is struggling against al qaeda atrocities that are coming across the region and the middle east and causing a lot of problems for the united states, don't the under secretary stand that taliban and afghanistan used to give safe havens to the former bin laden, and the are doing it so in pakistan region the to the borders, and now our government is talking about the government and they have no way

of talking to the process with them and they are setting up the offices in the middle east countries and they are funding them. does she think that this is al qaeda saving them from basically disappearing. >> guest: in the case of afghanistan the taliban was in power in afghanistan and they created a safe haven for the terrorist group called al qaeda. certainly that was in the late nineties and early 2000 and we saw the result of that in new york and pennsylvania and here in washington wants to bring 11 than 2,001. the head of fenestration certainly in our military in afghanistan and the afghan government are negotiating with

many elements of the afghan people to create a peaceful solution and to bring our troops home. the president of very eloquent getting the troops out and turning this over to the afghan people. that peace negotiations with whoever it is always excludes anyone with any terrorist ties. so if you are taliban but you can prove that you are not someone that has associated with al qaeda coming and you prove that you are basically a good person and that you are going to be someone who can earn a, have their trust earned, you are probably going to be a part of the settlement. once again this is led by the afghan government and it's not important to make a distinction that there are taliban on this in afghanistan and not all of them certainly car hiring al qaeda and it's important to make sure that whoever we are dealing with has no terrorist ties.

if the u.n. decided it's the right thing to start a war, in the middle east, they will take

from the u.n. and this begs the question that what happened to our sovereignty, our oath as far as the constitution goes. i'm calling my senator, leahy and sanders, to make sure these people get reeducated on the constitution and another reason why i think americans really need ron paul in office, because people of america have forgotten what the u.s. constitution has done, giving us freedom and sovereignty. >> host: i saw you shaking your head. >> guest: i know what the chairman of the joint chiefs and the secretary panetta said and we don't an by gait our sovereignty to anyone, including the u.n., and this is not about that. >> host: for those calling for a more aggressive stance with

syria, senator mccain is one of them. listen to what he had to say and then comment on it. >> asaud needs to know he will not win and unfortunately, that is not the case now. to the contrary, assad seems convinced he can wipe out the opposition through violence and is fully committed to doing so. can you tell us how much longer the killing would have to continue, how much additional civilian lives would be have to be lost in order to convince you that military measures of this kind we're proposing necessary to end the killing and force -- how many more have to die? ten house, 20,000? >> guest: well, senator mccain is a colleague and he doesn't corner the market on the outrage over syria. what is important is that military force is always on the

table. it's always an option. about that has to be calibrated with the opportunity to save more lives than lose them, and to have the best political transition and to do things in a reasonable why, and i think what is clear is that the opposition certainly isn't ready for something like that in syria, and what is important is that we have diplomacy and political transition that we're building the case against syria. i think that certainly in the region we have the -- we have isolated the country, isolated president assad, cutting off regime's resources resources ang sure the case is unambiguous, and we're getting the support politically and in the region. so i think it's important that before we decide that we're going to start to continue the violence, that we find a way to stop the violence and mitigate the ability to have a transition. >> host: the effectiveness of a no-fly zone.

>> guest: many levers of influence and shutting assad's capable off that have to be done first. this is not a country with a peashooter. this country has serious armament and it is desperate, killing his own people, and perhaps he understands he has a bad transition, but whatever his motivations are, he doesn't have anybody's best interests at heart, and when somebody is increasingly isolated and paranoid, they do thursday -- do crazy thing and it's important to have a measured approach, and be prepare, and we believe we're doing everything we can to minimize the violence, make sure that assad is aware that he is persona grata and we answer the tenant signifies to happen. >> host: who is our strongest

ally? >> guest: certainly in the region everyone is sending up, and certainly our friends in europe are important because we would have to make sure that we were able to support whatever happened. and in the region, the countries already taking refugees like jordan and lebanon and turkey, they need support, too. to be able to make sure that those refugees are peaceful people and are not bad guys and they have the ability to imagine it inside their own country. >> host: nato? >> guest: nato. well, you know, it's important to stay with what the region is deciding, whether it's going to include military enter -- intervention. >> for me, this crisis can be --

dip employ mat include but should be a clear no killing zone. i stress, no killing zone, should be established, and then that has to be protected. the way we are treating this crisis, reminding me, when it was read from the russias so we should -- we are allowed to go that way. not going to be another kosovo, too. so the thing only country that can make a difference for me is turkey. turkey is a strong country, but let be tell you what, turkey has to be reward it. turkey should be a member of european union, period, without turkey, no solution in that part of the world, i can tell you that. >> guest: i think the call are makes some good points. >> host: iran another topic.

there's an op-ed today by senators casey, brand, and lieberman, they write, some suggest it if we economic and diplomatic efforts fail we should accept nuclear armed iran and contained, much like we did with the soviet union, others argue the nuclear activities are a problem for israel and not a threat to the u.s. what is your viewpoint. >> guest: i listen to president obama and secretary clinton and secretary panetta. >> host: as far as iran's desire for talks about their program, should that continue while their program continues as snell. >> guest: we're about to begin some talks. they're indicated they wanted to talk again. we have increasingly been frustrated but the indication of talks leads to not talking. we have what is called the e-3 plus 3.

effectively managed by our european friends with us being part of it. >> host: what is that? i'm sorry. >> guest: three u. yap eu countries and led by ash continue, the foreign policy head of the eu, and we're a party but, once again, we're not leading these conversations but we're certainly there. and what's important is we've made it clear iran they have two things to do, and things will get better. first is hey have the to set their international obligations. they have to live inside their grandmas like the nonproliferation treaty and make sure the anymore region and around the world that are increase leg worried about the military aspects to their peaceful nuclear power program, they have to be satisfied. it's not because we don't like iran. it's because they been found keith, because -- found cheating and made inflammatory statements about israel and the united

states and the amibition for nuclear weapons is abated. so it's important for us to be satisfied, and secondly we would like to have the iranian people join the world of nations. they have been ostracized and outlawed abuse the regime that's been powerful for decades. so it's important. we made it clear the iranians what they have to do satisfy the concerns of the world communed, make us confident there's no military aspect to your nuclear power program. stop enrichment and then you can transition to a much more favorable place in the world. but until you do those things, you're going to continue to have people worried and you're going to continue to have people insist on accountable from you. >> host: currently a member of the atlantic council board of directors. >> guest: the atlantic council is an ngo and dedicated to the transatlantic relationship, not

only just nato but increase leg around the world. a very long history of, over 50 years, and we're inaugurating a n -- brent scowcroft international security center later in the year and it's one of the do tanks as opposed to think tanks and interesting, smart people that work hard on many different national security problems. >> host: the former undersecretary of state for arms control, from 2009 to 2012. do you have a current rome at state? >> guest: a parttime special envoy right now. i'm basically retire. >> host: duncan, oklahoma, thanks for holing, republican line. >> caller: i was just curious, did not the military actually perpetrating the crimes against their own people over there can they not be held accountable once assad is being removed and if so, if we can communicate that to them, wouldn't that slow them down on killing their own

sometime'll take my answer off the air. thank you. >> guest: certainly the international criminal court in "the hague" is a place for them, and as you remember, the former yugoslavia and kosovo war and other different kinds of problems, people were arrested and taken there, and held for trial. we see that there are low are level members of the assad regime that are beginning to quit the regime and move over to the people, and i think you're going to see that increasingly. obviously the gentleman is right. it's very key that the military make their decision, and i'm sure there's something with a wet finger in the wind right now trying to figure out which way things are going to go, and unfortunately they should be for the people. that who is gives them power. that where is their power comes from, not mr. assad. i think you'll see that's where the tipping point is, when do you start to see members of the regime and members of the

military begin to decide they're not going to kill syrians because mr. assad said so. >> host: keith, missouri, democrat line. >> caller: in morning. i'd like to make one point and two quick questions. point is that no american should lose his life over this matter in syria, and the questions are, what would happen to those americans who took up arms and vowed to kill the government leaders in this country? would they not be nil the streets? and the other question is, what gives the united states the right to go around the world saying, who should be what country lead leader? we need to concentrate on the people in our country. >> guest: these is not about an armed incentury rex against the government in sir ra. that is about freedom-loving anymore syria choosing not to leave under repression and they're only friend is iran. i don't have a lot of sympathy

for the regime here. i don't have any sympathy for mr. assad. this has been going on for over a year. these are not people that have taken up arms and are storming the capital in syria. these are people going to the market he can children in school, families going church and this is a very distinct difference. so this is not an invex. there are people that are now called insin century rexists? of course, but they are few and far between, and they're getting killed every day. so, this is not about some kind of organized civil war that's going on. this is really about denying the people of syria their rights and a president. >> host: off twitter, asking if number here rain us more a threat to its neighbors than american. >> guest: a nuclear iran is a threat to the entire world.

not only trip-wires a reconsideration by many countries in the region who have decided not to have nuclear weapons, but it also changes the posture for everyone because of the iranian regime's very close relationship with hezbollah, hamas, and other terrorist organizations. so it really changes everything, and president obama has been enormously successful on the non nonproliferation side, and the treaties -- and i think president obama has been herculean in the efforts and the key is to not have a new the number clear -- nuclear club, and we have had in this administration the most serious

sets of sanctions and galvanized a coalition, national coalition that has never been put together before. >> host: from press scott, arizona, independent line, michael. good morning. >> caller: hello. i'm just wondering, assad, what he should have done is have something like the patriot act signed first and then he could kill his people legally like we did. i think our patriot act is a prelude to our president doing what assad is doing. it needs to be repealed. his only problem. if he had the patriot act he could kill his people legally. have a good day. >> host: next up is plain view, new york, for our guest. >> caller: good morning. >> guest: good morning. >> caller: i was wondering if you knew who the opposition in syria was? and also, the arab spring, i think, is a misnomer because it

appears to me to be more like the arab fall because, in egypt, the opposition turn out to be the muslim brotherhood, and we began to see the burning down of churches and attacks on the christians. in other middle east countries we have seen the opposition turn out to be not who "the new york times" thought they were. also, i don't think sanctions on iran will work. they were put in place a little late. they should have been instituted under bush -- well, some of them were, and then obama -- it should have been done three years ago. it appears they're close to a weapon.

sanks have not worked on north korea. >> host: we'll stop there and you can take them as you wish other. >> guest: let's standard at the back en. we don't believe that the iranians have made an absolute final decision to make a nuclear weapon. we still believe there's a chance for the international community to influence them on what a mistake that we would be and that is the evident of dip application to make -- diplomacy, to make it clear that is an unacceptable condition, an unacceptable assumes on their part they could do that. so we have a tremendous amount of support and a big coalition. as far as sanctions, we moved to get the sanctions put in place. sanctions are the weakest tool anybody has in their arsenal, in their quiver of tip olympic tool -- diplomatic tolts but it's one of the fuels we have because the iranian government has been isolated from us for well over 30 years and has

basically been a pariah in its own region. so not the best thing to have but we are more successful now with these sanctions. we do believe that these sanctions are herring the regime because they said so. so, we think there they're more effective than we hoped they would be, but once again, it's about keeping the coalition together, and that's why gas prices are an important piece of this and the ability for people to get other sources of oil. on syria, the question really is, -- for me the question isn't who is part of the opposition. our intelligence community, our military and other analysts and certainly the arab league and others, are looking to make sure that these are people that are worthy of support. but i still think that the people of syria deserve our support. and that's what is very, very important. these are innocent people who are basically caught in the cross-fire of a regime that apparently with plenty of fire

power in its military who are willing to kill their own people instead of standing up with them. >> virginia is next. tony. independent line. >> caller: hi. i am form el military. you're sort of disingenuous there. this is a pro israel lobby pushes against irandown. thank you. >> guest: i may be wrong thanks buttite knock disingenuous. >> host: you're on, sir, go ahead. >> caller: i'm kevin. i have a question. i understand what they're doing in syria is wrong. and i don't agree with killing their own people. what about all of the people in africa that have all of these dictatorships that killed million0s people and the united states sit back and watch and don't do anything about it. my other question, you said that syria is backed by iran and

isn't syria also backed by china and russia? >> guest: i will tell you i think we're all ashamed about the slaughter we saw in africa, certainly throughout the 90s and parts of the 2000s and that enough wasn't done. but we are the united states of america. we are a north america. we have a lot of allies around the world but we tend to get involved when we're asked and we tend to get involved when there's a regional leadership and a way for us to be influential. i will tell you that while we were not militarily involved in many parts of africa, we certainly were human terribly involved and certainly were giving aid and giving support and we were certainly doing everything we could to stop the bloodshed, including working through international organizations like the u.n. to make sure there were peace zones and other things going on. i share your outrage but frankly, this case of syria is different.

syria is a semi developed country that has real weapons, chemical weapons, and they have a gettish -- fettish for supporting the wrong team, they support iran and hezbollah and hamas, and that is a bad mix and this is a tremendously volatile region and one -- and where we can be influential where we should be involved. >> host: your reaction to a recent poll saying 52% of those said that iran was on the brink of developing a weapon. >> guest: well, those polls are snapshots in time. >> host: what's the public sentiments. >> guest: i'm happy to see the american people and others understand what it actually means to have iran have nuclear weapons. that it is a nontrivial issue. it's one of a tremendous significance. it changes the entire complexion

of the middle east. it will change decisions other countries have made to not have nuclear weapons and it adds another country to the club and complicates the challenges of the 201st century and it's important that people see how important it is and i hope they appreciate how hard everybody is working. >> host: howard, republican line, california. >> caller: good morning. >> guest: good morning. >> caller: boy, do we have our plate full. >> guest: yes, we do. >> let me good back in time about 20 or so years ago when the defense department was thinking about developing an atomic warhead with limited scope that was designed to take out military targets buried in stone. i'm not quite sure -- i think it

was the clinton administration. this is crazy. we are not going to develop more atomic weapons. the question -- that's number one. number two if you don't mind, let me ask the undersecretary if she thought that the military hardware that the united states has sold and maintains in the middle east, i.e. saudi araina, -- saudi arabia, jordan, egypt, the emirates. >> host: your point, sir? >> the point is instead of using our hardware to fight this civil war in syria, what it amounts to is air support. >> host: we'll stop there. >> guest: i think once again,

whenever you have all levers of paul on the table, including military intervention, somebody is making a plan. this is realmy about letting diplomacy development and political transition take the lead, having the region take the lead, and making it clear president assad that there's no way out. the has oh stop and he has to go. >> host: a call from pennsylvania. this is john, republican line. >> caller: hello. ma'am, i hate to tell you but i would like you to tell me where in the constitution does grant the power to police the world? second, as you mentioned the nonproliferation treaty, that treaty was written to stop the spread of nuclear weapons. however, it did not stop any member who signed that treaty from developing nuclear weapons systems. >> host: that's all we have time

for. >> guest: that's right. >> host: so as you see it, what's the next step. you talked about sanctions or at least diplomacy, diplomatic action working out. >> guest: for syria, it's clear that there's an opportunity to go back to the security council, and i know ambassador rice is working with secretary clinton in the white house to build that coalition that would include the countries from february 4th february 4th and that, once again, is another reup soing international message to building the case to president assad that his attacks on his own people, that this unwanted killing of innocents, and the causing of people to three across borders and destabilizing the region is not sustainable, not a plan that is going to have a long-lasting effect. so it's important for us to continue to do these thingsful. i know for some people these things don't happen fast enough. they don't have enough for the

syrians that are going to die today but it's the most effective way to do this in a peaceful way to allow political transition to happen in a good way. that's important. now in iran, we'll see what the new talks have to say. they have to represent themselves. they have a chance to turn the corner and make the right decisions, to make it clear to the world community they don't have military aspects to their peaceful from and they are going to open their doors and let people, like the iaea and others in have a good look. >> host: the former undersecretary and former legislator, our guest. >> guest: good to see you.

>> hoover stands alone. he is like the washington monument. he stands alone like a statue encased in grime. as one of the most powerful men whoever served in washington in

the 20th century. 11 presidents. 48 years. woodrow wilson to richard nixon. no one like him. and a great deal of what we know, what we think we know about j. edgar hoover is myth, legend. >> time tim weiner, a hit of the fbi, on sunday's q & a. >> i believe it is yet possible that we will come to admire this country not because we were born here but because of the kind of great and good lan that you and i want it to be and that together we have made it. that is my hope. that is my reason for seeking the presidency of the united states.

>> the leadership of the mission has challenge to go to work effective immediately to bring proper respect for law and order in this land. >> at today's consumer fraud summit, eric holder said senior justice department officials met to discuss speculation on the oil and gas market. after the attorney general's opening remarks, federal and state law enforcement officials discussed different types of scams. targeting the elderly. people's tax returns. and fake business opportunities. the event took place on what the obama administration has edition it's inned as national consumer protection week. just over two hours. [inaudible conversations]

>> thank you, ladies and gentlemen, good afternoon, and thank you for being here today. my name is michaels be nick, the executive director of the fraud task force. i want to start out by thanking georgetown university law center for hosting this very special event we have had in and are having here today. and for allowing so many influenceal leaders in the department of justice and from more than 20 different federal, state, and local law enforcement agencies and offices, as well as nine different consumer protection groups to gather together under one roof to talk about critical issues that effect millions of americans all across the country every day. four weeks ago today, united

states attorney general eric holder announced the creation of the consumer protection group. punctuating his deep commitment to preventing and prosecuting fraud against some of our most vulnerable citizens. during his time as attorney general, he has charged civil attorneys and criminal prosecutors to use all the resources in their arsenals to enfans they're enforcement of consumer fraud. the efforts have been met with tremendous success. under attorney general holder's leadership fierce resolve to protect consumers we have forged strong partnerships with the consumer advocates here today and we will continue to do so through the consumer protection working group and events like this one. so ladies and gentlemen, it is with great pleasure and an honor for me now to introduce this afternoon's first speaker, the united states attorney general, eric holder. [applause]

>> good afternoon. >> good afternoon. >> good afternoon. >> there you go. thank you, mike, for that kind introduction and for your leadership as the executive director of the president's financial fraud enforcement task force. you're doing a superb job. it's a pleasure to join with you and with so many dedicated colleagues and essential partners as we begin today's really important conversation. now, i want to thank you all especially our distinguished panelist for being a part of what i think is truly an historic summit. i can think of no better tie commemorate and raise awareness of consumer protection week than for this group of stakeholders, this group of experts and advocates to join forces in examining the challenges we face in identifying the solutions that the american people deserve. now in this conversation, i'm especially grateful nor commitment and the engagement of

the consumer protections group, and in tick want to recognize director michael bloom of the consumer protection branch and the co-chairs. today is the working group gathers for the second time since its inaugural meeting in february i want to express migrated gratitude for your sleetership of the expert your dedication of protecting the help, safety, and economic security of consumers across the country. these are goals and responsibilities that we all share and each one of us has a hole in fulfilling them. for me, and for today's

department of justice protecting american consumers is a top priority. and as we have rededicate ourselves to this work in recent years, we have also learned some essential lessons, primarily that fully understanding threats that consumers face in protecting their interests in a comprehensive way, that's something that the justice department can achieve on its own. we cannot simply prosecute our way out of this problem. so, we need your help. we need your perspective. we need your expertise. we need your talents. we need your determination. and that's precisely what this day is all about. earlier this afternoon we kicked off an important event and unprecedent it conversation between the working group's leader and key consumer advocates. we talked about strategies for enhancing civil and criminal enforcement of consumer fraud claims, increasing public awareness about common schemes and ways to report them, so ordinary citizens have the knowledge they need to fight

back, and building on the momentum we established in the fight against consumer fraud. as a result of discussions like this one, and thanks to the strong partnerships we forged with the federal law enforcement officials, regulatory agencies, as well as key state and local authorities, we have been able to gain access to the wide array of tools and the extraordinary department of experience that we will need not just to continue to work that is underway but to bring the fight to the next level. especially in these times of great economic challenges, recognize that the need to move aggressively to combat these crimes has never been more important. and that's why i'm proud to report that our nation's department of justice and so many of the consumer groups represented here, have responded to these threats not with despair but with resolve, and with decisive action. during the last fiscal year, the department consumer protection branch achieved an astounding 95

conviction rate and they obtained sentences totaling over 125 years of imprisonment against more than 30 individuals. these achievements build on the remarkable success of the financial fraud enforcement task force which has helped secure convictions against they had those responsible for a wide variety of consumer scams, including telemarketing schemes, fraudulent job training and referral services and even an enter prize that generated over $75 million in victimized 350,000 small businesses by placing unauthorized charges on people's phone bills. since last april when i established a new part of the task force known as the spoil gas price fraud working group, we have been focused on identifying civil or criminal violations in the oil and gasoline markets and ensure that american consumers are not harmed by unlawful conduct. this working group's latest

meeting was held at the justice department just this morning and its members discussed a variety of topics, including the role of speculateors in the market. recent reports such as the ftc and the new york state attorney general's offices and ways to improve information sharing between working group members and partners, and where do we go from sneer i can report some of the members of the federal trade commission are currently conducting an investigation, with assistance, whether gas prices have been effected by antitrust violation or market manipulation by refiners or oil producers are transporters, marketers, physical or financial trader ors others. working group members stand ready to act if the ftc learns anything that implicates the laws they enforce. the task force has also been at the forefront of the administering's efforts to seek justice for those who were devastated by the recent

financial crisis, since 2009 what he was helped to bring charges, secure con contradictions to obtain prison sentences up to 60 years in a variety of charge cases charging securities fraud, bank fraud, and investment fraud. using criminal enforcement tools where possible, and civil penalties and sanctions where necessary. i think we have made great strides? holding individuals and institutions accountable for the reckless, inappropriate, and often times unlawful conduct that helped contribute to the financial crisis, and by employing a similar collaborative approach, we have been able to make history. in january the department of justice and housing and urban development, other agencies, and 49 state attorneys general, achieved a langmark $25 billion agreement with the nation's top five mortgage services, the largest joint

federal-state settlement on record. this will provide significant assistance to struggling home owners and communes will serve as a model for what we can accomplish win we work together across federal agencies, state boundaries, and even across party lines, and for a another new task force known as the residential mortgage backed securities working group. we can all be encouraged by achievements that have of have characterized the last two years but there's perhaps no better illustration of the progress we have made than a groundbreaking work to combat healthcare fraud. of the last fist cass year alone the department and its partners recovered nearly $4.1 billion in found stolen or taken improperly from federal health care programs. the highest amount recorded in a single year. and over the last three years, for every dollar that we have spent fighting against health care fraud, we returned an average of $7 to the united states treasury, the medicare trust fund, and others.

now, these numbers are stunning. there's no question that we should be proud of the results we have already achieved. although the health care fraud isn't a folk call point of the group. the ongoing work will augment our consumer protection effort and is this is no time to be satisfied. we cannot afford to become complacent and we must and will continue too seek new avenues for communication and collaboration with partners like you. with the assistant and expertise of the friends and allies gathered here today and through discussions like those that will take place this afternoon, issues ranging from fraud, targeting elderly to common tax schemes, to business opportunity fraud, we will develop comprehensive strategies and implement innovative new solutions to preventing and combating consumer fraud in the years ahead, and my colleagues and i are counting on each and every one of you, american consumers are depending on you.

and i look forward to all that we will be able to accomplish together. so thank you all very much for the great work you're doing and that you will do. thank you. [applause] >> thank you, general holder, and thanks to all of you for joining us here today. happy national consumer protection week. we are -- this week is really an opportunity for us to do a number of things to raise awareness about consumer protection issues with consumers around the country to begin to think about our own efforts, enforcement efforts, education efforts, when it comes to protecting consumers from fraud and scams. but i think the most important thing that this week is proving

to be is an opportunity for us to come together and to share ideas, thoughts, to achieve some synergy, talk about efficiencies we can achieve by working together and we have already started to do that. this morning we have a shred productive meeting with consumer advocates in this fight for a long time and with a federal partners and state partners, to talk about how we can work better as a team tackling these issues. as the attorney general mentioned, protecting the health, safety, and financial well-being of consumers has really been a centerpiece of this administration's antifraud efforts and over the last three years, we in the civil division of the department of justice have refocused and redoubled and really re-organized our efforts to protect consumers by creating a new branch, the consumer

protection branch, and the work of the branch, which the attorney general mentioned in his remarks, has been going on for 40 years, but what we have done is to -- they're been enforcing federal consumer protection statutes for a long time. but what we have done of the last here to years we have provide additional resources. we have given that branch an expanded focus and we have renewed partnerships with key players in the consumer protection space so that our efforts are even more effective today. we enjoyed great partnerships with the ftc and the fda and the consumer product safety commission, our new friends at the consumer financial protection bureau, state attorneys general, great strong partnerships with u.s. attorneys around the country, and several others, and we have really through these partnerships, stepped up our effort to enforce consumer protection laws in a number of areas, including

mortgage fraud, food and product safety, counterfeit phenomenon surety cals, investor ripup schemes, marketing, healthcare fraud, our interest grows in for-profit colleges, and the fraud is another area of growing interest type of fraud that preys on immigrant communities and those redoubled efforts have led to record-breaking results and that's really a testament to the partnerships we have been able to establish though you last year's numbers. when you look at the numbers from january 2009, you see that the consumer protection branch in its efforts has recovered a record breaking $3.72 billion in criminal fines, civil pents, restitution, to victims. when you add up the sentences of the defendants who have been convict during the three-year

period you fine it cumulative adds up to more than 259 years. so, it is a record of success but, again, as the attorney general has said, we have much more work to do, and that's why this gathering is so important. and so last thing i'll say in close before i turn it over to my friend and colleague, randy brewer, one of the things that happens in washington, dc when people hear a new working group, is they think, oh, a new working group. woopie. right? one of the things i think we have seen time and again with the financial fraud enforcement task force and the working groups that have been form, whether it's the mortgage fraud working group, i have had the great privilege to work on, or the rnbs working group or some of the other working groups, the atlantaans participated in and those in the room participated in. the reason we formed these working groups is because they work.

they have really led to very significant results when people are coming together, people who have -- are focusing on similar enforcement challenges, and we are bringing together the full panoply of federal and civil and criminal and state authorities to bear on these common problems, and when you add to that in this context, bringing in the ideas of so many consumer advocates, i think we have a recipe for success again, and so i'm very, very pleased at all of you are here, it's really a privilege to be able to be image gaged in this effort with you, and with that, let me bro dues the assess stand attorney general of the criminal division, my friend and colleague, randy brewer. [applause] >> thank you, tony. i just want to echo what tony was saying. the working groups are only as

good as the people involved. only as good as our willingness to deal with the issues at hand and try to find as comprehensive approach as we can. my view of these issues is the same. but to some degree we have different topic areas but on some level all different levels of fraud and criminality more, their focus nationally and internationally and stuck matter. with the working group does is exactly what tony says. it gives us an opportunity to have real discussions with real experts. we started hearing from people earlier today. and i think if we -- at least my criminal division will be better because we're going to start focusing and to give you a real example, i grabbed one of my deputy chiefs in a section and said i wanted to deal with the issue, and the very same way that a few weeks ago the residential mortgage backed securities group were able to

come up with a holistic approach to the area. we need to raise awareness and we have to understand that fraud, particularly at a time of financial distress, when people are feeling more vulnerable, is a time when people are absolutely at their most vulnerable and at greatest risk of fraud. we also have to be realistic that crime today is global, and we also have to be realistic that more and more today organized groups will sometimes perpetuate fraud. so, one of our goals, one of our goals in the criminal division and with our our partners is to try to nye who are committing these crimes and how are they committing them? one thing we know is that some crime, a fair bit of consumer-related crime, is internationally based. it's not always here. sometimes fraudsters realize they can better escape law enforcement if the do it

abroad so we're trying to deal with international partners, and we talked to our partners to fine out what we need to do. we're trying hard to extradite people. it's why i was in romania to talk to our partners there where romania has been incredibly strong partner with news dealing with indemnity fraud. jonathan rush came into the office this year and one of the areas we identified is disaster relief fraud. since katrina we learned unfortunately that americans and others have huge heart. so when people call up and say, i'm raising money because of this calamity, could you just donate money in people do. so we created at lsu a comprehensive approach we had agents from all different law enforcement entities and prosecutors and hotlines and

it's worked. we have not eradicate edit relief frauds but we have prosecuted many, many people and have received very high sentences. we have educate people and just this week, and last week, with the tornadoes that ravaged part of the united states, we immediately started a new educational campaign. as tony suggested, we're going to keep learning and trying to do more and more. we're going to try to educate those who are most vulnerable. sometimes in these kinds of crimes we know people are embarrassed they were scammed. maybe they were embarrassed because they donated money or gave money because they thought their life's partner, who they never met, was a kin dread spirit and needed money 0, an elderly person was defraud it thinking a relative or grandkid had asked for money and guy money and it was the furthest from that. so we have to figure out how to help our most vulnerable.

we in the criminal division have identified these boilerroom in costa rica where criminals from the united states and other places go and 24 hours a day they man phones with one kind of consumer fraud after another. you won the lot lottery, a relative of yours has suffered a disaster. just send us this much money. we have extradited those people. one was recently sentenced to 30 years in jail. a whole group of others were sentenced to between four and ten years in jail, and as the attorney general said, prison has to be a component. and then lastly in our partnerships, such as with the terrific u.s. attorney from the central district, we took down a group, an organized crime group and they engage in identity theft and consumer fraud, and we went after them and we are

prosecuting them and have prosecuted their leadership '. so like tony, i'm glad i and my team can hear from folks today. we're going to keep work forward and we're going to keep holing those who would per pit wait these frauds responsible. thank you. [applause] >> good afternoon, i'm kent marcus, he head of the enforcement division at the consumer financial protection bureau. we're the new kids on the block. i was think today as we were meeting with some of the consumer advocates, that we probably -- at least than one year old, we have probably been doing this for about as many days as the collective group of people have been doing it for years. so, we're gratified to be invited to join in these efforts. we come to the table in these efforts with a wonderful array of tools, and part of our

objective is to try to think creatively about how we will use that set of tools that we have been provided by the congress. we have the able to engage in supervision, enforcement, rulemaking, consumer engagement, consumer response, and all of these tools together, i think, help us be more effective in the way we do the work that we're all engaged in. the references that several of us have made about the earlier session with the consumer advocates, i thought yielded a good example of where that kind of collaborative activity is both necessary and justified. it was-i thought, striking in those discussions that these single topic raised most frequently in that group as to what was an area of concern, was illegal and fraudulent conduct associated with debt collection and it was a topic over and over and over as we were talking today. well, earlier this week, our

director, rich core day, indicated in a speech to the states attorney general he thought this posed an doesn't challenge we should all collectively take on together. that there has been outstanding work that has been done with respect to efforts to undermine illegal and fraudulent conduct associated with debt collection. the ftc has brought more cases in the last year than in any recent time in anybody's memory, maybe ever. they have done that in substantial collaboration with the justice department and with the united states attorneys. the attorneys general across the country have been working on bringing debt collection cases consistently and regularly over the years, and yet in a meeting with consumer advocated to it was the single topic that drew the most task. what that says to us is we need to collect together -- together and collectively look for ways to do things in new ways, different ways, utilize new tools, new con september

concepts, how to bring about changes we would all like to see, and not only in our area. i use the debt collection as an example of the many area wes nod to do the collaborative work that others referred to so, i want to indicate that we are both humbled and thankful about joining with all of these colleagues who have been working for substantial time on these difficult issues and we have generally appreciated the welcoming and generous way that we have been invited to the table to help fight against consumer fraud and violations of consumer laws along with all of them. and so, with that, and with our commitment to bring our new tools tools and new energy and new resources to at the table, let he then introduce my friend, david vladik, the director of consumer protection at the federal trade commission. [applause]

>> marcus may be the new kid on the block. we're the old guys on the block. the ftc is the nation's oldest consumer protection agency. responsible for consumer protection and competition. over the last three years we focused our resources on dollar frauds. frauds aim ode at taking the last dollar out of the wallet office people rendered vulnerable by the economic downturn. now, we do all sorts of things other than enforce. we do rulemaking, possession policy initiatives, consumer ad work which is available at our web site, www.ptc.gov. i want to talk about our enforcement cases because the commitment that tony spoke about earlier and attorney general holder spoke about earlier, i think really deserves a moment of reflex. -- reflection. i've been doing consumer

protection work for 35 years. never before have the federal agencies involved in consumer protection met with consumer advocates, heard them, and made the commitments the government is making today. tony's forces have grown exponentially. we have the new kid on the block. we finally have the resources to play fence, -- to play offense, not just defense. i want to talk about the ftcs enforcement mission. when we bring an enforcement kay case we have three goals, stop the fraud, get whatever money we can find and return it to consumers and then rougher it to lanny, tony and andre and hope that the justice department puts these guys in jail. so let me talk briefly about the bread of our enforcement work. as long as we're gripped with this economic downturn, people, home owners, are in defall or

foreclosure. that's a breed ground for fraudsters, earlier this week we filed a case against hundred office defendants engaged in loan mod scams and we'll continue to do this work at a high volume until we root this problem out. mortgage servicing. yes, there's a tremendously good settlement against the top five. there are more mortgages servicers out there who need to see the federal government. we're working, i know -- i know the cft and the department of justice are working on these issues. a debt in terms of resources, the largest issue we confront and we confront it in multiple ways. one is there are a lot of debt settlement scams. if you listen to tv, if you omore than 10 tho thou of debt,

call us, we'll pay down your program. most of those are scams. we finished a huge trial in dallas and we're toupe 20 cases but this issue will not go away. phantom debt. increasingly, people are complaining that they are being called by debt collectors and they owe no debt. often these are people who have searched for payday loans online, all of a sudden they're getting calls from call centers in india. we know where they are -- trying to force people to pay debts they don't owe. with threats of arrest and imprisonment. we have shut down ten of them in one case. we filed two weeks ago. there's motive of this litigation to go. debt collection. we filed eight cases in the last year, and we have got more to come. debt collection abuse remains the largest single complaint we get at the federal trade

commission. candice wright, we have been fighting this with the corruption of -- with the cooperation of the justice department but the complaint goes up. we'll be doing more enforce independent this. we're going after debt buyers. there's a new industry out there stale debt used to just sort of be written off. now it's -- we call it zombie debt because we can't kill it. and debt collect collectors are collecting stale debt with the great assistance of the justice department we just settled a case against the largest debt buyer, asset acceptance, requiring it to let consumers know that the debt is past statute of limitations before the try to collect on the debt. and we are very grateful the justice department's help in this case. payday lending. payday lending abuse is on the rise and payday lenders are

hiding offshore or reside on indian tribes and claiming tribal immunity. we had a case against tribal payday loops and there's more to come. job scams and business opportunities. with the unemployment rate high, people out of work or working or want to find extra pay, scams and business scams, there's going to be panel on that later this afternoon. that will talk about our work. fake government scams. fake government grant scams. still ongoing even though the stimulus program is over. we have talk about this before wire fraud scams. fake check, grandparents scams, lottery sweepstakes, the they're proliferating. we're going after them not only by going the scammers and then turning them over to lanny's folks for prosecution but also

going to the wire transfer companies that enable this. we have an order against money gram. we have been working with western union. precious metal scams. robo scams, telemarketing scams. cramming. i could go on and on. but our mission, until the economy brightens, is going to be going after these last-hour scammers, shutting them down, take taking whatever assets we can and then turning them over to the justice department so they become guests of the state. thank you so much. let me introduce my colleague, andrea, who is the u.s. attorney in l.a. and is a very good partner of the ftc. we're vary grateful for andre's work. [applause] >> well, good afternoon everyone. i bring greetings from sunny and extremely warmer los angeles. so, it is a privilege to be able

to spend some time with you this afternoon. i'll look forward to engaging in learning a lot from you here this afternoon. as mentioned i'm the united states state attorney in the central district of los angeles. it is the mees populace district in the country i represent almost 18 million people. and with a district with so many consumers, it is unfortunately home to a variety of targets and crimes and scams that you have heard about today. some examples include your foreclosure or loan modification scams that prey on homeowners. your advanced loan schemes that target the small businesses in our district: porters of counterfeit goods who sell to low income neighborhoods. awe buyssive tax preparers who target low income taxpayers and skim inflated refunds and your fraudulent immigration practitioners who charge based on false promises. and i could go on and on and on

about the different scams that go on in our district. but i want to tell you we have been very pro-active, not only in the central ticket of california but throughout the nation and our colleagues in the u.s. attorney's offices have been working with us of objective is simple. to investigate crimes, outside indicate the public about the scams and hold those responsible, those individuals accountable. so, let me give you some concrete examples of what these scam artists or what i call these scum artists really do on a day poise day basis just last weekend in the central district of california we charged acknowledge identity theft case in the the defendant was alleged to have stolen credit cards and bank account numbers from more than 600 victims by sending our e-mails that looked like legitimate banks asking for updated personal information. in january of this year, a father and son were each sentenced to more than 150 months in federal prison and

ordered to pay $39 million in restitution for running a scam that defrauded more than 1,000 victims with the promises of large returns on investment in companies that were developing films in los angeles. last month a corporation in los angeles was order to pay a fine of million because they were mislabeling vietnamese fish and selling it as grouper throughout the country and last year man was sentenced to six greer federal prison ton conducting a phony secret shopper business, an opportunity scam that included offers to may people bar tenders. those are just some examples we have had in the courtroom but our victories in the courtroom are not all that we need to do as it relates to combating consumer fraud inch the come inning weeks and months you'll see u.s. attorneys offices in the country working with partners on the civil side,

regulatory side and consumer groups to deal with the issues. in many cases, an ounce of prevention is a pound of cure. and we want to provide the consumers the tools they need and educate them as to scams that are going on throughout the country. and the only way i think we can do that is by working with good people like you here today to exchange information, educate each other, and hopefully develop strategies to target this type of conduct going on throughout our nation. as i often say we're only as good as the information we receive and as mentioned earlier the information we sed in the early 'er section was productive and informative i and i have a lot to brick -- bring back to my district. i look forward to hearing from all of you today and look forward the great work we'll continue to do to ultimately achieve the goal of protecting our consumers. thank you. [applause]

>> thank you, andre. david. tony, lanny. and now other than david, if you don't mind, allow or panelists to come up to the stage and we can begin with the next portion. the next portion of the summit will be a panel on fraud on the eldery. the moderatoril be michael bloom, the director of the civil branch of the civil division. the panelisted will be dana, elizabeth, director of consumer and state affairs aarp, anyway ohm in the keep, jonathan rush, deputy chief forking extra and poll circumstance fraud section of the criminal division, department of justice. jeffrey steger, the senior litigation counsel from the consumer protection branch, department of justice. and abby, the director of

consumer protection in the office of the indiana attorney general. and with that i give you michael bloom, our moderator. thank you. [applause] >> thanks, and good afternoon. this panel, i suspect, will be very interesting and informative and let's get to it. we're going to talk about fraud directed at the elderly, and a natural question is, why do we have a special panel on fraud on the elderly? and there is research that concerns particular vulnerabilities that older folks have that make them more susceptible than others to certain kinds of frauds. and i'd like to start with betsy, about some of the research that the aarp may have done concerning those vulnerabilities and if you could give us those factors that make older folks more vulnerable

perhaps to the frauds we have been talking abouted to. >> it's on. okay. i want to -- there are not a great many statistics about how many elderly are victimized but we know that elderly financial abuse is dramatically underreported. maybe 24 people are victimized for every one that is reported to any kind of a criminal or social service agency. and it's probably the most pervasive form of elderly abuse and mistreatment among -- new york did a survey of people who were 60 and older, and 41 out of 1,000 had suffered this time type of abuse. this didn't include people who were cognitively impaired.

the investor protection trust century fade older people and their children and found 20% of those over 65 had been taken advantage of financially threwthrough an inappropriate investment, unreason whether i high fees or fraud. the lawyers community for civil rights shows that 45% of scam victims were over 50. and they included 41% of the loss with the foreclosure rescue scams. we -- one thing we would like -- which we have nonbeen able to research -- is better statistics on this -- met life had a report where they estimated almost $3 million -- billion -- excuse me -- had been lost and that 51% of it was embezzled be strangers and 34% by family and friends, anymore the same clutch or

neighbor -- church or neighbors, people they knew, and i'm looking forward to the business opportunity fraud because a lot of older people have lost their jobs and have been unemployed longer than they have ever been before. so, we have done research and i'm -- my friend, naomi carp, is going to talk about one report because she worked alt-a -- aaap and wrote the report. and it's in the hall. and if you want a short version, that's also there. and it surveyed and summarized some of the data and trying to find out what financial advisers, those dealing with clients directly, and the compliance officers, and how they tried to handle the problem on the investment side, and eye know that naomi will carry this

further. i don't always have good news to bring you. we had a very well-designed project that came out of the west virginia office where they bought these sucker lists, these are the same -- i don't know where they come from. that's certainly something that should be investigated. there used to be the new widows list but i think they're much broader how, and these aarp volunteers would get these sucker lists. they called the people on one-to-one and spent time trying to train them to resist telephone fraud, stranger fraud, and they tried variousing mages and found the one that seemed to work the best was giving them a strategy to respond at each step of the fraud. and they did try to -- this is a very -- took a lot of people to do this and this is an expensive

thing to do, even though we were using volunteers. and they wanted to see if they could teach those on the phone to resist scammers. they did find that compared to a control group, more -- two weeks later when there was a pretend scammer calling them up they were more resistant, unfortunately six months later they weren't. so there was 0 no longer a difference between the groups. so, we clearly have to keep educating people. we have to educate the families and the communities in addition. but we also have to try, as all these people are doing to stop the frauds before they get there. because many of that's people just do not know how to resist it, and i think that one -- one of the issues that we have had is that it's not only that people, win they have the

diminished capacity, the first thing that tends to go is their ability to handle their financial affairs. at least people with prealzheimer's disease. there also seems to be something -- there haven't been much research about this -- about being more trusting. but it's hard because there's some people that seem very resistant to this. i was just reading the was washington post and john kelly was talking about a green dot scam but green does not mean go for it. and he does the usual, if it sounds to good to be true. it is. i've been doing that for 30 years, doesn't always work. when a stranger calls to say you have won something, you haven't. clam down the flutter of excitement and listen to the voice saying why would somebody call you out of the blue to tell

you won a sweepstakes you didn't remember entering. sadly enough people listen to the other voice, the one that says why shouldn't dumb luck small upon me? i do not deserve the universe0s love? and the scammers make a decent living. 0 so have a real issue in terms of trying to prevent it other than through the great work of law enforcement. >> and that raises the question. why it would be that older folks may say, why doesn't dumb luck shine on the something about them that perhaps -- talking about the research you have done. why would older folks think that -- >> it's a pressure to -- a pleasure to be here. i want to talk generally about that question. why are older people targeted and why are the particularly vulnerable. and then sear flow a little bit more on what betsy mentioned

about diminished capacity and the research that was done. so, the research really shows there were quite a number of reasons older people are target and the include -- they're the poem who hold the largest portion of the wealth in our country so even though individually many of them may be poor, that's where the money is and that's where the scammers go. it may be that they are more trusting and that they are more unsophisticated about financial matters. there's often a presumption that they are more vulnerable and thus they're targeted because they're perceived as being more vulnerable. and they may in fact be more vulnerable due to cognitive impairments that i'll go into in a second. also, many old elder people are more isolate, and thus they are more dependent on helpers of a whole variety, and those helpers have great access to their money and to their documents. so, these are crimes of

opportunity. so, just to zero in for a minute on diminished capacity, i think with the age boom and with people living longer, more and more people are having cognitive impairments and diminished ability to make decisions, including financial decisions, and we have family members, the financial services industry, all kinds of industries and professions saying, oh, my god, we have this coming. we don't really understand it. what are we going to do about it? so capacity -- diagnosis make capacity is not an all or nothing thing. it's made up of number of types of capacity. we have capacity do make personal decisions about your everyday life, capacity to make healthcare decisions and then capacity to make decisions about financial transactions. and what we have learned as betsy said is that financial capacity -- it's been called the can anywhere re in the coal mine

of capacity. really the first to go. and it's made up of a number of skills. it includes your basic monetary ability. identifying and counting money, understanding debt and loans, conducting cash transactions, paying bills, and then i want to underline this last one, because this neuropsychologist have done research and tiedfied this one component of financial capacity is maintaining judgment to act prudently and avoid financial exploitation. so you can see when financial capacity starts to go, people become more vulnerable. and the population numbers, not to throw a lot of numbers out you, but they're pretty astounding. declining financial skills start to happen when people have mild cognitive impairment. 22% of americans age 71 and holder have mild cognitive

impairment. so that's a lot of people. one out of eight people 65 and old older have alzheimer's disease. so let's bring it closer to home with an example. dad seems fine. he is still handling his bank account himself brokerage accounts, and then the bank teller sees him perhaps making sudden and uncharacteristic large withdrawals or having multiple overdrafts. or the broker is getting calls to cash in his conservative investments and to buy shares in a risky startup that he just heard about from his new best friend. so, we all know and many of us have had personal experience that it's really hard to take away the car keys when dad's reflexes are getting slow or his vision declines. but one day we fear that dad's car will hit a child crossing the street, and so we do something about it.

similarly, we don't want to take away mom's financial driver's license, and then we see mom being taken by a lottery scheme, buying inappropriate annuity after attending a free lunch seminar, or getting ripped off by her home care aides. so you can see we have a huge challenge. i'll just talk quickly about the research at aarp public policy institute that betsy talked about. it was in the investors sphere but we surveyed frontline financial advisors, broker/dealers and compliance officers about, do the understand diminished capacity? do they see it as a problem? do they have protocols in their firms to deal with it? are they worried about financial exploitation? what do they need? and the message was loud and clear, yes, they see it as a problem. almost all of them recognize ited. some of them had protocols but

their protocols were all over the map. they overwhelmingly say, we need training on diminished capacity. it should be mandatory but our firms don't require it. so, i think it's interesting that there's a recognition but yet we don't have the tools yet and we're going to all have to start working together to create them. >> one of the points, one of the schemes was the lottery scam. and jeff stiger who is any n my office has done work on lottery scams. can you talk about what a lottery scam is with the focus on how this scam uses vulnerables that were talked about. how they use that to their advantage to steal money. >> sure. as a prosecutor with the consumer protection branch week currently participating in a number of investigations involving lottery scams emanating from gentleman --

jamaica and preying ionizes in the u.s., mainly elderly. scammers call potential victims in the u.s., including many elderly people, and inform the potential victims they have the hey won cash and prizes, sometimes cash and a mercedes, typically a car, but mostly money. we're talking about millions of dollars these people are told they won. and indicate that the winnings will only be delivered once the individuals pay up front fees, taxes, or insurance. victims end up sending the money through wire transfers, through entities that david mentioned earlier, through western unions, through money gram, through stored value cards, the green dot card that betsy mentioned, and that money ultimately will

be sent down to jamaica. our office is currently in the middle, as i mentioned, involved in a number of investigations. i i just want to give a profile of five recent victims that we have talked to, meaning within the last couple of weeks, and i'm going to be very generic. these are ongoing criminal investigations. one is a female, early 70s, she was working at the time. she was living alone. received a call that she had won a sweepstakes prize of $3 million to $5 million. during the conversation, the initial conversation, the fraudster was most interested in knowing from her what it felt like to win the lottery and that was singhly to gain her trust. over time, they had many conversations, many e-mails. he was able too get her trust and she ended up sending thens of thousands of dollars wiring

tens of thousands of dollars which actuality ultimately we believe ended up in jamaica. a second victim, female in her late 80s, living at home alone, in a small town, she acknowledged that she entered sweepstakes at times. she was called at least 12 times in a two and a half week period and wired money to them. a third victim, a male, in his late 70s, early 80s, a widower, lived alone in a small town. he was an owner of a small business during his career, and he was a victim of this type of lottery scam. a fourth victim, female in her 70s, lived in a small town. lived alone. acknowledged she entered sweep stages such as publickers clearinghouse and was victimized by multiple groups over a period of several months and she wired money to them.

she got suspicious after she didn't get her winnings. but they offered her an excuse saying that because her fees were not coming in as quickly as they had anticipated, that her winnings were delayed and she got caught up in the scam. finally, a fifth victim, female in her early 70s, again lived in a small town, they sent her a check to purportedly pay the fees that this was going to be an advancement she deposited the check and she immediately or shortly thereafter withdrew the money from the check and sent it out. the check bounced and so she was out that money. to put a little bit more meat on this profile, these people that we have been talking to most recently, they are elderly but they're not in their 90s.

not nursing homes. typically people who are living aloam -- alone. they're independent with some disposable income but not a huge amount so after a couple weeks when they'redivable income is gone it's not unusual they would take out a loan on their house or more typically -- or typically they would taked a cash advance on credit cards. to talk about their profile a little bit more, these -- the scammers who, at least in these investigations, are from jamaica, they will call these individuals more than perhaps their family members will call them. >> jeff appreciate stop there that goes to something we talked tot jonathan about. what is striking about these individuals is they're living alone and that perhaps part of what the draw is they have

member to talk to and that goes to something called imposter frauds. i know you may have third different flavor but jonathan, can you talk about imposter fraud, and also talk about your work internationally because as jeff said the money is being wired internationally and sounds like perhaps there are frauds around the world that are similar to ours that can inform what we do. >> hanks, mike. let the talk about imposter fraud and then as mike suggested, talk about the broader ramifications of the type of mass marketing fraud that mike0s-and-and our section and several u.s. attorneys offices and federal investigative agency partners have been working on. imposter frauds can fall into a couple of different categories. one of them, which has got an lot of currency lately among hard-core fraudsters is the grandparent scam. we first heard of best several

years ago in japan. where -- and the mo for this is fundamentally he same as in the united states. people get lists of others typically senior citizens, or they may be calling these people cold, and when when the feign rings and the person pings up, the person says, it's me. and depending on whether they know they're calling an older person, obviously it won't work in every instance but often times the person will say, johnny, is that you? and that's all they need. it's like, yes, grandma, it's me. so so blade got you. i've been arrested. i'm here in -- fill in the country -- here in france, here in the netherlands. i need bail money. can you possibly wire me some bail money? or, i've been in an accident. i need money.

i have to pay the hospital. can you just send in money to me right away? naomi and beth both talked on the issue of different kinds of vulnerables that may stem more from neurobiology. these are the types of scams that would readily play on the heart strings of anybody who simply makes a mistake and never anticipates the possibility that someone would be calling them up with this specific purpose of lying from the very first words of the conversation. ... ...

engaged full-time in the koran. and specifically targeting older americans. now, why is it that they would be doing this? well first of all, for a long time, u.s. law enforcement has recognized there has been a two-way trade you might say an flaw between the u.s. and canada. going back as far as 1998, a series of regional task forces were set up across canada but u.s. and canadian participation to work. telemarketing fraud and other massmarketing fraud on a collective basis. and all of our major markets

ranging from the federal trade commission to the fbi, postal inspection service about participation in different ways than these task forces. but the frame of reference has changed. now with jet talks about fraud he didn't say southern california, is to reconnect, jamaica, the dominican republic and further afield, spain and other parts of the world. in part because we have seen an assistant attorney general brewster marks highlighted this as well. as we've seen the globalization of crime in general and the globalization of fraud, including the globalization of techniques. when we first started to compare notes with our law enforcement colleagues going back probably four or five years ago in australia, canada, the united kingdom and even nigeria, we

started to find we were talking about the same kinds of scams at the same kinds of techniques targeted against the same kind for many of the senior population often as well by the same groups of people. so part of what we decide to do and i think it is fair to say that mike's office, front section multiple u.s. attorneys have focused on this particularly. what we are trying to do is take our ability to respond to these frauds directed at older americans to the next level, where he share information with each other about who from our respective investigations than intelligence figured out at the main players behind the schemes. where are they watching the scheme's friends predicted a list from? are they recruiting? how did they organize? where the moving money? more and more will be focused on within the justice department and the federal law enforcement community has to do with sharing

information better, faster, court anymore effectively as the department at the ftc has done very successfully over a number of years, but recognizing fraud has become globalized and particularly when you talk about targeting of seniors for some it has the scans, lottery scams come agreed. skins, ultimately we have to move faster come to share information faster collaborate faster. one example of what we can do, but it takes that kind of actors sustain cooperation between law enforcement and other countries. >> at his court nation among law enforcement. the international component will affect the messages in the sunday consumers. some think david would like to talk about the ftc is recognized in international component in how it affects messaging or the message they give up consumers similar the.

>> let me put this in context. this has been a terrific summary in the kinds of scams plaguing our older people in the united states. but they pose a real problem for law enforcement and consumer education. so let me sort it renders some of the reasons why that is so. these are retail rather than wholesale scams. one of the reasons to this scam typically is gaining someone on the phone and having a conversation with them. they may be initiated through the internet or through the receipt of a fake check, but generally there is one-on-one interaction between the scanner and the done. second, as jonathan has pointed out, a lot of these are not in the united states. they're in canada, jamaica, ghana. we get these complaints, you know, now even peru and spain show up on our list in terms of

where these kinds of calls originate from. so these are not the boiler rooms in tampa that we can shut down easily. third, there's a multiplicity of scams. if you want to educate people about grandparents cans, that's when things. but please take multiple forms. grandparents cans, lottery, sweepstakes, fake checks, mystery shoppers and nasty multiplier the skin takes a geometrically increase consumer ad. why do a three-pronged approach in the ftc. first and foremost we want to start the scans and close down the boiler rooms. the very closely with the canadian authorities, jamaican authorities and others to try to find these guys and stop them. we also are trying to go after what we think is the pivot points here.

at some point the elderly person is to send money to the scam artists. and that is the point where you can go after the wholesale, not retail. so money program is the second largest money transfer, and the underwater. we have western union agreement to abide essentially the terms we have in our money clearwater. one of the things we've done and starting to really yield results this week insisted on bravely clear consumer ad. so if you walked into many wal-marts today, hopefully within a year you can walk into any wal-mart. many grants principal outlet or in wal-mart stores. they are under our order. you'll see facing u.s.a. consumer interbrand of mourning. if you think you've won a lottery, guess again. if you are sending money to a relative, call them and make sure. if you think to check the hs

cashes a real chat, wait a month because it probably is sent. he threw been hired as a mystery shopper, again, sorry. you are out of luck. and they are training the personnel who actually been the desks dare to talk to an elderly person who's about to wire money to jamaica or montréal or, peer by sending this money? in one of the sad parts and this gets to what, you know, naomi and beth were talking about before sometimes they have to say that person. you know come you didn't win, but it's this right here. i about a million dollars. and there's tragic stories in which ultimately they leave the money program tablet which won't let them wire the money and they go somewhere else than that which underscores the difficulty of succeeding on the consumer ad

fraud. >> well, just to echo what david was saying, commonly in these types of scams and i believe david will know this, in order to ensure the victim that they have been made very well received document on ftc letterhead, doj letter head, on irs letterhead, on federal reserve letterhead, saying they have one to lottery or saying this amount and the tactics that the government can use is that there are laws against impersonating a federal employee are using this of staff. >> let me just finish. so one of the things we are doing is not only going after the wire transfer companies but for example, has agreed not to allow basically refunds getting money and jamaica. we are working out the stored value card companies in order to

try to combat the fraud because that's important as stopping them, you know, going after the skimmers is common to really get real traction here is by going after the money and stop being an interdict game the flow of the money. >> and that is an important conceptual law enforcement are using, which has some have called a choke point, where can we attack a legitimate business to stop the flow of money. we were talking about don a blessing to be sophisticated fraud overseas using phones and wires. but the tried-and-true door-to-door fraud still exists. teen men are still around not selling aluminum siding anymore and if something abby cruise and the attorney general's office in the about the tour de france it's still happening. >> unfortunately still very common. we at the office have seen all

of these camps within among the consumers they are representing. one of the scams that is very common in our area, partly because every year we face a lot of storms, which you've all been reading about in southern indiana and tennessee and illinois. we'll escape tornadoes. the risk of severe stories detail, et cetera. there are a group of skimmers that will go from door to door and from state to state, following the storms. we typically call them storm chasers. sometimes we have a different purpose yammers viticulture travelers that comes seasonally depending what the issues are. in the case of the storm chasers what will happen is they will follow a disaster and they'll go door to door door to door and say things like, i just repaired your neighbor's roof and i have some materials left over. i'd be happy to give you a discount on your repair for your

house because i've got one more day and going to be here if you can decide right now. so there's always this high-pressure sales, the concern for your going to make a deal only right now. we did it for your neighbor, so they are trying to get a number of areas of comfort with respect to authority than your neighborhood, et cetera appeared of course we have even seen people get up on the roots and make damage so that they can sensibly repair it. a lot of times the insurance company gets involved with attack the person into signing over their ability to take the money, et cetera. it's a very pervasive thing we see every single year and seasonally as well and it's a really big problem. we also see many teams develop and touching about interns that person's helpers coming into peoples homes and taking advantage of elderly persons. >> if you could expand we've

been talking a lot about strangers calling up. and since we've been talking about folks who know -- >> the opposite of strangers. it can be a family member of placement testing that can be somebody takes advantage of the situation has been in the home of the individual. repost the same person who were committing identity theft and this is something we warn people about all the time, where you got a repair individual who's come into the home to fix the toilet or something in the home and especially elderly people, that really any of us don't think about what kinds of personal information might be lying around in the house while the individual is wandering around affecting the repair. it's a very important one of things to educate people about it before you some stranger into your home, he sure to walk or run your harm especially where they might be a cover up everything, make sure anything that is -- that has your

personal identification information is taken and put away someplace safe. we find that i'd really appreciate all the research that aarp has done because we find education one-on-one to be much more effect to the elderly than anything else. so what we do is go all around the state and i would encourage ftc and federal partners to use the state processes, a lot of us have extensive average apartments, where he go around the state and specifically educate groups of elderly populations. they listen to us because they think of us has been the start amount of authority for them because we are the ag soft as. so we have a bit of trust. and frankly, it's just harder to reach people with paper and this is a curse a population where you've all have awesome materials on the internet. but they don't use the internet and they don't look on the

internet for information. they don't even know they need the information until you tell them this is what's going on. we do it annually if not more often. >> in the interest of time -- >> i think i'll just leave with one question is just the natural outpost directly to david. some folks don't know to ask her what is out there. one of the things they could comment on is how do i enforce that learned about fraud? how can folks be more willing to report them in hagley turner and and tell people about things happening? >> well, we depend like every other the person agency said forward. and so one of the things we've been doing is common ground compensates. we've been going over the country meeting with consumer group, legal services, local law enforcement to try to encourage people to reach out.

and that effort has killed an enormous difference because we are getting people in the nursing homes were to reach out provides services to the elderly. >> i think that daschle stop a mac that's a fascinating point that a people in the room here i suppose can take that as a last message. you can reach out to where folks are. >> well, thank you, folks. thank you for the information. [applause] >> the panelists are to my immediate left sally cooper, director of operations for the internal revenue service criminal investigation into her last is safwan and the department of justice and they

are going to talk about again, and tax the consumers and individuals should watch out for as they are preparing to file their returns. so sallie, carol. >> good afternoon, thank you for having me on the panel this afternoon. as mike said i am sallie cooper, support for irs criminal investigation. one thing we are talking about is listening to the panels is that there is a permeation and scan and commonalities between the scams in every panel it seems to be presenting today. as far as criminal investigations, ci is the investigative arm of the internal revenue service. we support the overall mission of irs, but we enforce the criminal statute relative to tax administration and related financial crimes in order to

encourage and achieve voluntary compliance of the internal revenue code. once the investigation is complete, we afford a recommendation for prosecution to our partners at the department of justice and with the tax division to reduce our work and authorizes for us to go forward with prosecution and they can interns prefer it over to their respective u.s. attorney's office. ankara was going to give a little bit about her mission. >> the tax division does reveal all criminal referrals from the internal revenue service, criminal investigative division. our attorneys to a lot of the prosecutions, but we really rely and the united states attorney to carry the bulk of that water in the criminal prosecution. we also have a simple arm, actually more civil attorney because as you know, there's a lot of affirmative tax

litigation, which actually may be seen as anti-consumer. i've been doing for closures forever 22 years, so there's a number of people who probably don't like a big part of our mission. but we also combat in the civil side a lot of the kind of scams that will be talking about today that we'll be talking about today. for example, getting injunctions again bad tax preparers and abusive tax shelter providers, things like that. see we are working in accordance with the recent member random, pushing parallel investigations and proceedings, where we civilly shut down a scan, collect as much to link with tax and possible, but also investigate upon criminally wherever possible so we are really pushing those parallel

proceedings. >> each year the irs has been putting out both recalled the dirty dozen. what that is is a list of 12 -- the type of scams that are perpetrated against innocent taxpayers. i am just going to cover a few of them today, but topping the list this year is identity theft. and again, you have heard that mentioned through several presentations and it is becoming so critical to protect your personal information. assess just mentioned on the previous panel, even having someone in your home, you have to be careful of which you have laying around. the irs is taking a very proactive book at identity that. we are sending notices to taxpayers, which is sometimes the first noticed their identity has been compromised when we see more than one return being filed

or received that adobe too has been filed in the persons named that as an unknown employer. in january, the irs announced where we did a coordinated sweep week, trying to attack this identity theft issue. now anyone that believes that their identity has been compromised, there is an irs identity protection unit and that information can be accessed on irs that the hammock for identity theft. mr. birotte out of the attorney's office in los angeles mansion attorney acted a sheen as well. fishing is very someone uses e-mail or some other electronic media to try and solicit someone to respond either giving personal identification, giving account information and for irs,

it can appear that it is coming from either a legitimate irs inquiry or some related entity. irs will generally not send an initial solicitation or requests for personal information to a taxpayer. so that is to be a warning sign right away. if you couldn't e-mail from someone that it appears his irs or appears is related irs, be concerned and don't respond. either call irs, go to the irs stack of them at first steps to take. but that is one way with a get your information again, they can use that for all types of skin to file false tax reform. they can use it to pay mortgage loans. they can use it for all types of things and it's very hard to correct one's that happens.

>> let me just add with the fishing, the attempts to get personal information from consumers and then what happens is generally the skimmers turn around and file some sort of false refund claim. an offense, sally mentioned, the first notification a victim will have the somebody else has stolen their identity, has gotten their personal identification is when they go to file their own tax return and it gets bounced because the irs authority received what appears to be a legitimate tax return under that individual's social security number. the skimmers file tax returns very, very early in the taxis in. in fact, most of them are in vacation by now. and if you are like me, you are just thinking yeah, pretty soon i think any to file my tax return. so you know, the legitimate folks tend to get really

surprised by this. we prosecute. the irs has been referring these refund crimes facilitated through identity last to the justice department and we participated in the january push the sally mentioned. we have even been to remember, when a deputy attorney general testified before a house committee since november have had a ton of very timid very strong send his for refund crimes that include aggravated identity theft count. and a lot of these were able to get as part of sentencing of restitution component. so with restitution hopefully to the times and sometimes they are not everybody that is involved in the refund crime is necessarily affect them, but there is restitution for and defend the times as well as to the u.s. treasury.

collecting that is another story, but the court has been pretty receptive to giving restitution to both categories of victims, both the individual and the united states. >> thanks, carol. he made a good point that all taxpayers were subject to a scan may or may not be the guns. in the first to come and officiant ip fast probably are more big guns been part of this scheme. but when you talk about questionable return prepares and you go to a return preparing give them your information, you're ultimately still responsible for what is on the return. so in 2012, every return preparer needs to have a prepared tax identification number and when they sign every turn, they need to enter the return or number on the return. let me just say, they're focusing on consumer fraud, but most of the return prepares out there are honest and decent.

we are focusing on those ones that are taking advantage of individuals. some of the things you need to watch out for our consumers need to watch for when they choose a return preparer is one doesn't return and enter a fair tax preparer identification number. do they give you a copy of the return because you should always see what has been filed with the irs before it is filed. and you should get a copy to sign. are they promising you a larger refund than you thought you would get? it goes back to the old adage and somebody mentioned it earlier. it sounds to to be kate to be true, it probably is. do they base their fees on a percentage of your refund? that is also a clue because it probably means they're inflating the refund in order to increase their fee. do they require you to split the refund with them quite and do

not ever send a blank return and then what in the levant and then it in because he can't remember if you go to return preparer to have your return preparedcome to your alternate responsible for what is on that return. and this comes into an injunction earlier in that is one of the mechanisms that are used again fraudulent return prepares. >> right. one thing to keep in mind is something like 60 or send to u.s. taxpayers use a paid return preparer. and i sally mentioned, most are good. they've gone through continuing education programs. they have their preparer tax i.d. number and they do a decent job. but it is the ones who are perpetuating fraud in taking advantage of consumers that are the real problem. we can deal with that in the

federal government to waste. number one is prosecuted not because it is a crime to file a false return. it is a crime to assist people in filing a false statement with the united states. the other thing we do and can also do much but quickly instead a civil injunction against a bad return preparer. to stop them from preparing bad returns. that can frequently be done much more quickly than a criminal prosecution. typically what we do is get a referral from the revenue service on the bad return preparer. we play to several client, maybe people work with return preparer, get a preliminary injunction, issued a press release right away and the community knows we have a back return preparer or at least in the community and then make incriminated junction.

a member of the bad return prepares very quickly say we did that. we will start preparing returns than they get a lot of these injunctions by consent. in fact the u.s. attorney's office in los angeles is doing a fabulous job getting consent injunctions from bad tax return prepares, often as part of a plea agreement in a criminal prosecution. so they are killing birds with one stone of which you do is have an incredible deterrent of five. you clean your area out of bad return prepares and that really is the power of both the criminal and seasonal junction. one of the typical provisions in a civil injunction against the tax return preparer is to return prepared prepared notify other client that they have been prohibited from preparing

returns and that perhaps tax returns they get prepared for false or fraudulent and also provide the internal revenue service at the list of all the clients for whom they prepared tax returns. now, what that means prequel is the internal revenue service will then go on to find the clients and try to make up the tax lost in the individual clients. a lot of them are very upset by that, but remember the goal is to collect the right amount of tax for everyone and a lot of these people are eager to consider back return prepared for a sally mentioned, a lot of them actually participate in the filing of a bogus return to a bad return preparer. so it's kind of a delicate balance there. but we do try to collect the right amount of tax to the civil and criminal proceedings. >> the last one i will touch on today is what we term free money, where people put up

flyers and advertise that hey, come into us and you can get free money from irs. this typically target some of the lower income individuals and the elderly as we just heard about. they charge people for filing their returns in sometimes returns don't go through, but they are to have their fees and they are gone but that money. we have a number of tools and criminal investigations that we used to go out and identify the taxpayers, to do investigations and our goal is to enforce those laws and ultimately put people in jail that are committing this fraud against the taxpayers and the government to deter that from happening in the future. but just like we are meeting here today in people at the working all day, one of the best preventive measurements is awareness, so that we do outreach of me going talk to people so that they are aware

that the scans are going on and hopefully when someone approaches them with something that does appear too good to be true they think twice about it before they commit or turn over money or turn over their identifying information, even when you are going not to do your own personal health care or other items, a lot of times the formal ask you for your social security number and other identifying things. and i found generally my highest and as the primary and i never have it. they never come back and ask me for it. they are always able to process about the information. since much as they can get out as little information you put in a public venue, the better because any personal information is vulnerable for someone to pay back her best to get it and use it for misdeeds, whether it's filing a tax return or other scans that she'd heard about. ultimately there'll to make money for somebody who is

getting it that it doesn't belong to. as far as irs, if you have any questions or doubts that any information that you receive, especially unsolicited, please go to www.irs.gov website and they have official information that has been put out and would be used by the irs for official business. >> and just a little reminder on the table outside, sally has put down the press release that this series' dirty dozen. so if you want a little light reading, you can read about the other scans we deal with if you can't get access to the internet this afternoon. >> thank you very much. [applause] >> our next panel is on business opportunity fraud schemes. the moderator is charles harwood

, deputy director of the bureau of consumer protection for the federal trade commission. the panelists are lois greisman come associate director and division of marketing pact says that ftc. andre birotte new york from earlier for the central district of california, richard goldberg, assistant director of consumer branching civil division at department of justice. ed mierzwinski, director for the united states public interest research group are also known as pirg and peggy shanks. so with that i turn it over to chat. >> thanks, mike. [applause] >> i'll let my panelists apcs here and i'll just begin with an observation. who among us hasn't at one time or another thought she, would it be great if i could go out and start my job, maybe was only a

fleeting thought, but i suspect if we took a pool of consumers who would find many things they have within them someplace the ability to make it on their own, to start their own business, to maybe the next banks, but the very least go and do something and make them a little extra money. in many instances, his stops right there. consumers think you would be nice if i had no business, but they pretty much thought at that point. in terms of financial anxiety when people are anxious in turn, i suspect when people are thinking that their job is at stake, they think they need extra income because they are getting the hours they used to be kidding, dating there facing extra education cost because they've got kids in college and i worried about medical bills they may be facing or the realist, for example, retired it doesn't go where they thought it would here for whatever reason they feel financial anxiety. frankly that's the situation

many find themselves in right now. i think it makes them more likely to decide to take that next step, to go and actually try to make money on their own and sign up for a business opportunity or to try to find a work-at-home scheme. when they go in the marketplace and begin to look around, what they find this very many, many companies and individuals who are happy to help them start that business opportunity program or start a work-at-home program. that's exactly what we'll talk about today. the problem is we are going to see them see them in his father in any legitimate opportunities out there, there's many, many for consumers and up skin and find themselves worse off than before. we had him in a panel today to talk about this then i will start with lois greisman who is at the federal trade commission. do you want to talk recently about what we see that the fraud schemes? >> sure, thank you, chat geared its a problem that is not going

to wish a as chuck violated with the economic downturn people are unemployed, underemployed for various reasons they need to supplement their income. i want to take a moment and say what is the business opportunity it is just a commercial arrangement. i will help set you up in business or joe pay me to help you set up and i will provide the something that may or may not be real, perhaps securing an outlet, setting up the place, location assistance or maybe i'd will be willing to buy back your merchandise, which often is the touchstone of a work-at-home scheme where you fit a home stuffing envelopes or building various pieces of crafts and i will buy them back and find a market for you. consistently a top complaint getter in the complaints the ftc receives over the course of the year last year the ftc received 1.8 million complaints. business opportunities are in

the top 20. >> next to lois' rich goldberg with the department of justice. i need to know a lot of work in this area concerning prosecution. but you talk about one of the schemes you see don and what you found. >> sure, typically business opportunity firms involve the sale of vending machines, coffee machines, internet kiosks, any kind of self-contained unit that can be placed in a retail outlet and the location are promised a business opportunity firm to sell supposed to be high traffic, high profit locations where the player of the machine is going to earn a large profit. so frequently counted the salespeople use earnings claims to help prospective buyers they'll make their money back within a year or so. do send them to references to claim false leg they own a successful opportunity with these vending machines. frequently a day are the cousins

are brothers or other salespeople posing as real customers but in reality they are getting paid to lie to prospective buyers. customers will also be referred to locators who will promise these high-traffic high profit locations when in fact you're just part of the conspiracy. one of the scan some of our attorneys in the office have uncovered is a particularly nefarious kindness this scam could they did it in conjunction with the postal inspection service and this is as a skin that appeared to be out of the u.s. come in various different. these scam artists reported to be in the u.s. they purported to sell coffee machines or greeting card display racks from the u.s. but in reality they were in costa rica. all signs from the perspective buyers indicated that they were in fact in these cities in the u.s. to use voice over ip to make it seem like they're using real

phone numbers in the u.s. they were using drop boxes in the u.s. other mechanisms to disguise the fact that david salespeople, the locators and reference that are actually all sitting in a boiler room in san jose poster recut. and though they had various phone in the boiler room to indicated phone numbers, the u.s. phone numbers they were purportedly from. they have script saying hi, i am john doe and i'm a successful buyer of the business opportunities at the telemarketer sitting in san jose new what to say to the prospective buyers. working closely with the costa rican government, we were able to execute search warrants for costa rica on the business opportunity in san jose and were also able to do a number of arrest and extradite these folks back at the united states and and they received very high

sentences as a result of the prosecutions. these typically, the scans we've prosecuted have been ones where it is not true these consumers should have been aware that they were being scanned. this isn't the circumstance of his good looks too good to be true, it probably is. because these consumers are doing their due diligence. calling references, colin locators, looking at the better business bureau to see are these businesses highly rated? the problem is the scans will open up one name, ran for nine or 10 months and closed on resurface under completely different theme and location. so there's no way that consumers could go in no way to better that this is actually a fraud that's been going on for years. so while in some context database is good for is numerous, for consumers in the business opportunity industry, they won't know. they need to look at the advice of the federal trade commission

gives because otherwise they will fall for this scam. >> thank you, rich. next is peggy shanks who is with the attorneys general office and if you want to talk about what we've seen from the state of maryland internist this up to the? >> for said that to say anything if they may not be the opinion of the attorney general and education information. having said that, today many of the skimmers rely on type knowledge he and abciximab selling, but i can assure you that telemarketing are alive and well. recently we got for such cases, one of them involved elderly women and described a case a little bit, but it's pretty much a typical. color eggs calls and says the business opportunity to great investments to purchase the website for an online mall where

she was so travel packages and she's going to earn commissions. it piqued your interest so violator collar because her and says he's going to be your account and a churn hopper set it up. she buys three levels of packages into their $9600 for just one sale. so he also told her she was going to get these travel binders to about these discount coupons and vouchers and things and help her business. so she buys her virtual office and gives them $300. on the same day after that, he says, you might be the natural advertising because you're probably going to need to increase your sales and get people interested. she gives them a credit card number for another $1500. a day later he calls it back and says come you know you could earn a thousand dollars from sale as a level one direct or pay. she pays an additional $2000. two weeks later be called sir to upgrade to level two director package. this time she's going to get the

and she's going to get 6500 targeted visitors to your website. she was concerned because she had a credit card with a really high interest rate, but she put $4000 on a credit card. two weeks later see call it says you should upgrade to level three director package. now the elderly lady says and start calling up a piece a savings bond for my daughter's college education. you're going to pay for your daughter's college education with the money you're going to earn. she writes a check for another $7900. two months later he calls her mother added he thought she saw the bunny so for an additional $600 she could get an auto responder that would help promote the website. months passed and cg is trying to get the voucher binders then she never received any. she invested $18,300 made your money.

and our state the commissioner does not have the authority to order money paybacks. this arizona company after that filed bankruptcy. now you think is a credit or she's going to get her money back? we all know that's not true. anyway, maryland has issued a cause and a correspondent i cannot tell you the outcome. in the order it alleges violation of the fraud another misrepresentation that we are seeking for a permanent bar against the company and the president from offering signed business opportunities in maryland. the problem with all of that is just as rich said, and many of these companies is not a sinking ship. they resurface as a new entity and company name or spouses are those sales reps and there's the home of the new company. >> thank you, peggy. to my left is andre birotte, and we just heard from reaching peggy about this opportunity

schemes away. instances reconsider last $18,000. i'm wondering if you could talk about some of the fraud cases dressed to prosecute, how serious and what kind of relief for convictions he been able to obtain. >> sure, you mentioned some of my earlier remarks and one of the advantages if you will as we try to devote our resources where we can get the biggest impact. and when i'm being blocked, and talking really about the sentence. we will typically take cases that have a high dollar amount. anywhere -- i hate to say given our dwindling resources, bullishly top rod cleans anywhere from 2 million to 5 million mark in a minimum and there's a number of reasons. we've only got about 200 federal criminal prosecutors in our district to represent 18 million

people. as you can imagine we have to pick and choose as it relates to cases. but also because when we get the cases, we sentencing guidelines that take tape or at least are a guideline to the court. oftentimes the fraud schemes are tied to the last amount. so we want to try to proceed forward and make sure we get a sentence to become of the public know if you commit these kinds of crimes who will go to prison for a significant amount of time. as i mentioned earlier the individual defrauded 87,000 victims went to prison for six years in federal prison in way that individuals for 12 years involving schemes that were in the $39 million, $6.9 million in other incidents. protecting the high-volume amount with high sentences. the purpose is because we want to have the press and the public know if you try to commit schemes the federal government is going to be watching them are going to try to impose -- hold

you accountable to the harshest sentence we can. >> thank you, andre. when the next turn to lois. audrey is talked about the prosecution efforts they have made, but what other activities with a tape to protect consumers from the scams? curricular activities or rules in place to protect them. and after loiselle come back to peggy and ask her views state level. >> the ftc is a wonderful new tool at its disposal. it's a regulatory requirement that requires the seller of a business opportunity to provide a one-page disclosure and a streamlined, short and tidy as it can be. there's disclosure's pet who is the seller, with the nature of the business opportunity, party litigation they may be involved and perhaps most critically any earnings claims are made to recoup your investment sixguns can start earning $10,000 a month.

anything like that has got to provide written substantiation for those claims in the disclosure document also requires a list of references. senecas timber has had his or her does go so the ability to find upper purchases most recently in what was the variance. disclosure requirement took effect march 1 and i can assure you the ftc alone with our partners at the state and federal level will be vigorously enforcing it. >> and peggy, how about the state level? am curious what sorts of resources are available for consumers and learn about the state level and what can they turn to quite >> well, we had the maryland business opportunity sales that, where it covers -- i like the new business opportunity rule expanded in scope. first he says they may have to make a payment over $500. under our last payment over $300 within the first six months.

under the new federal law and now covers the work at home schemes. so i think that's really a good thing. our law does not cover that, but the business opportunities that are traditionally were certainly been covered with still continue to register and will still be required to file a disclosure document required under our act because it would give greater protection and more disclosures relating to the business opportunity. for example, the very first thing would be described what the seller promises to do. it is going to talk about the agreement through a rich is talking about in the location assistance of locators and those types of things. the most important disclosures is whether or not they look at in this territory. everyone is competition is really important. they are going to disclose finding arrangements, but they will include copies of their financial statements on older than 13 months. they are going to include risk

that is if it is of a high risk of speculative nature. the most important thing is they look at the disclosure document of the federal rules or state rule and they look at it before they sign or paying any money. the federal book at and seven calendar days. under maryland the list 10, four business days. this is allowed time to review the disclosure and to check, check, check it out before they invest. >> thank you, peggy. i want to get to that, but looks like we have enough time to ask a question plus maybe this will go to you. there's a lot of tools here for dealing with this opportunity problem. what is your view has been to pull those tools to gather and undertake a coordinated effort to try to stop it quite >> we've got an impressive track record years is federal and

state, civil and criminal and each of the last several years we have coordinated with our law enforcement partners. we called them sweets, fight initiatives to pull together is to tackle business opportunity fraud and a whole slew of 1 dollar frauds. the most recent was within the last 12 months. i was named and empty promises. no less than 90 actions were filed by the ftc and its fun for its law-enforcement partners. we think this gives us the ability to have a max moment at a visual impact which gets a lot of press coverage and we always couple the law-enforcement activities with the whole consumer education piece. >> 80, and erect at some of the joint efforts as well. >> we have limited resources for criminal prosecutions. in many of those we work with the ftc, u.s. attorney, and even the fbi. the case comes to my mind where there is such a joint enforcement action. maryland had initiated an

investigation, but we needed some additional assistance we went to the u.s. attorney's office. very quickly the fbi joined in and executed a search and seizure warrant. the result in a federal prosecution and criminal conviction of a 32-year-old mormon for the sentence 30 months in a federal penitentiary. >> thank you. first from a criminal interest -- i wonder about the federal level. are we successful in working together with the states and the ftc click >> we have put the department of justice branch has participated in all of this weeps at the federal trade commission and the state counterparts and impact of the last several sweeps the better criminal prosecutions over 140 criminal prosecutions of business opportunity fraudsters over the last several years. those have included defendants who have been sentenced to prison terms of a few years.

the ringleaders have gotten sentences of 10 years, 15 years and over 20 years in jail for this sort of fraud. we've had some defendants were fearful of criminal prosecution and fled to other countries that we've been successful at arresting these folks who have fled in countries that close arica and also the philippines and foreign governments have been very cooperative extraditing individuals back to the united states for prosecution. i think it serves the deterrent effect of filling criminal action. >> this is nationwide. in a world of dwindling resources, the task models seem to work well wherever you are. quite frankly, most of our big cases we get from our partners at the state or local level from a regulatory agency. in some instead is, that commutative of the iceberg that we get some information about a ring that's going on and we

start to build upon and get the baker earned her losses to locate to level and really bring a big impact on the community. >> thank you. i'm wondering, we've heard about this scam, the injury, but who are the big dance? idc put think they can make money overnight? would you know about them? >> i think people should turn to the left and then turn to the right and look at the people sitting here. it is not the other guy. the market in the mirror. it's people like you and me, educated people who have done their due diligence as david vladeck said earlier in the bad economy are facing with last dollar scams that target individual consumers for mortgage relief for debt relief and we also had cans that target people whose jobs have been downsized and the people whose spouses have been laid off, retirees whose 401(k)s for x stephen king novels because of the crisis wall street dump on us. so it's really everybody.

i see that people have done their due diligence as rich said. >> same thing with your victims click >> absolutely. one of the challenges we had in trying to get the big dems to come forward. we recently had a press conference, not so much in the business opportunity, but the relative in distress schemes mentioned earlier. we are able to get seven folks to come forward. when you looked at them, one of the persons i worked with the city of los angeles in my prayers chap was college-educated and the challenge i think is getting people to come forward and not feel that it could happen to anyone about that we try to do is let people know that. >> i am assuming in addition to law enforcement is educational components about this. you want to talk about what kind of educational efforts you know i've been made quite >> will briefly, i would tell you first of all i think the federal trade commission website

is the place i would recommend that consumers start. look on the website, ftc.gov@business opportunity fraud. you should also check with your state attorney general. maa g.org. find their address they are pouring your state website at the national consumers league is here. they have the site fraud.org, which is very helpful to consumers. i would really advise people to not pay attention to the information from the people that are working passably and fraud with the fraudster, but to consider talking to their friends, talking to local consumer groups and saying i am thinking of giving someone that i don't note 10,000 or $20,000 to make a lot of money. what do you think? but consider hiring an attorney for one hour of consultation.

they're a lot of places i would start, but it would go first to the ftc. >> lois, take a look at the disclosure document so they can get that. tonight absolutely. we streamlined it to one page to make it as readable and accessible as possible. and also to serve as a warning. if you don't get the one-page document, ask for. if you get a run around, leave. but i want to just echo something that rich and hungry and others have said. oftentimes victims are sophisticated people in there just is no quick fix here, which is one of the reasons that cuts remain as vigilant as we been in enforcement in the area. >> let me finally -- the worst happens when people find they have been victimized. what should they do if they discover they're not going to get their money back, they've lost it. >> file a complaint ftc.gov.

as the reasons where tens of thousands of complaints and reuse them. our law enforcement partners sitting here you send them a dog went to a centralized database. last year 1.8 million complaints went into the database. they're an absolute treasure trove. it is a resource we can use. they develop a case in the first instance of another secret operating out there to find it tends to help us build that the evidence we need to shut them down. and i would also urge people obviously to file complaints with the better business euro and also their state attorney general. >> i would echo to assure federal state regulators and attorneys general office also has a website or you can call us. you're in the right church, wrong pew. they will forward the call to consumer or security or even to other state agencies. we network with other state agencies across the country. we're constantly sending e-mails. a lot of the fraud we see comes at consent of arizona and nevada, utah.

and sometimes it's necessary, but one thing is to report it to come forward. the first question everyone's asking is how do i get myself in this? i asked myself that all the time. there's a lot of people do fall victim to business opportunity fraud. nothing to be ashamed to good the real question is what can i do about it? mailing, there's a private right action to save and not just for not registering. still doesn't mean they're going to get their money back. it is important to report if you know someone who's been a victim because they may prevent market guns. on a final note i would like to say there's a new kid on the blog. we've seen a new company that no context to the guns and says they can help you get their money back. of course we will see. so now they become big demised a second time.