Ag Warns Of Scams And Cartels

Goddard warns of the recession-spurred rise in schemes and child abuse



Courtesy photo

Terry Goddard

Wanna make $1,000 a month from home?

Wanna get some bailout money to save your house?

Good luck and watch out.

Turns out, both work-at-home and mortgage scams are booming as a result of the recession, said Arizona Attorney General Terry Goddard during an appearance Saturday at a gathering hosted by the Gila County Democratic Party in Rumsey Park.

In a wide-ranging interview after his appearance, Goddard said his office has had to lay off 30 investigators and lawyers in the face of a dramatic increase in reports of scams designed to take advantage of people who are financially hard-pressed.

Complaints about work-at-home scams have tripled in the past year, said Goddard. Typically, the scamsters tell people they can make a lot of money working from home if they just buy a franchise or some sort of package. Typically, almost no one can recover their initial investment.

In addition, Goddard’s office has reported a 30 percent increase in scams involving offers to help people save their homes by getting a federal grant or negotiating new terms with their mortgage lender. Typically, the scamsters collect an upfront fee, but do little or nothing to save the victim money on their mortgage, said Goddard.

“Arizona is the target zone for a lot of foreclosure fraud, which are scams of the worst kind, because they take the last few dollars a family has to stay in their home,” he said.

However, schemes to bilk people out of an upfront payment in hopes of starting an in-home business now rank as the No. 1 consumer complaint, said Goddard.

“We’ve had a number of successful prosecutions against companies that make extravagant claims. The bottom line is, when people are really desperate — because they’ve lost their job or are about to — they look for a way to supplement their income. Scam artists know this and dangle these riches — and because people don’t know a lot about Internet sales and they’re gullible, they end up getting socked.”

Unfortunately, while the recession has increased demands on his office, it has also cut the number of attorneys and investigators available to look into those cases. Last year, the attorney general’s office eliminated 30 positions — and may lose more in the upcoming budget year.

“In a small office, that really hurts,” said Goddard. “Looking ahead, the proposal that came out of the House Appropriations Committee would do us very significant damage in terms of protecting Arizona citizens from consumer fraud.

“Everything my office does is more needed in an economic downturn — from protecting children from child abuse to claims against the state,” he added. He noted that reports of child abuse and neglect have also increased sharply in the past year.

That strain on the attorney general’s office accounts for the decision last year to sidestep a request for an investigation into an alleged violation of the open meeting law by the Town of Star Valley, which made repeated changes that significantly increased the salary of the then-town manager.

The attorney general’s office normally investigates such allegations. For instance, last year the AG’s office concluded the Payson Town Council violated the law requiring public bodies to act only during properly noticed public meetings.

The Payson council agreed to undergo training and make regular reports to the attorney general’s office to resolve that complaint. But when allegations surfaced against Star Valley earlier this year, the attorney general’s office sent the complaining council member to the Gila County attorney’s office, which is now investigating the complaint.

“In the case of Star Valley, we just had to decline from the beginning,” said Goddard. “I just hate to do that, but when you’ve got major organized crime cases and other issues knocking on the door — you have to make choices. No doubt about it, we’re triaging — and scrambling to take just the most important cases.”

Currently, his top priority is the effort to crack down on Mexico-based gangs that have turned Arizona into the nation’s leading pipeline for both drug and people smuggling.

Goddard said despite efforts to increase border patrol manpower, the efforts of state, local and federal agencies remain poorly coordinated.

“The sheriff down on the border still has to use his cell phone to call the feds,” said Goddard.

He said the key to stemming the growth of the Mexican cartels lies in shutting off the money supply, which was the approach the FBI took to dealing with organized crime in the United States. Goddard’s office moved aggressively to seize assets of alleged organized crime figures — an effort now being challenged in an appeal before the Arizona Supreme Court.

“We can do far more to intercept the money. We’ve got a huge problem with organized crime at just about every level — including command and control between state, local and federal. We still can’t even talk to each other on the radio.”


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