Winnipeg Free Press - PRINT EDITION

Advertisers bilked: province

Police publications didn't exist, say court documents

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As many as 140 Manitoba businesses may have been bilked of money after being snared in an alleged telemarketing and advertising scam.

And now, the province has won a court order freezing a Niverville-based man's assets in connection with an extensive multi-province inquiry led by Winnipeg police.

Telemarketing-fraud losses in millions

IN the first six months of 2012, telemarketing fraud cost Canadians about $30 million. While there are many scams perpetrated by phone, one is known as the "fake advertising scam." A business gets a call from a fake publication asserting ties to a legitimate organization supporting social or community issues and claim to target a large and concerned audience.

Businesses who pony up for ads are sent invoices, which they often don't question if the amount is low.

Sometimes a proof of the advertisement is included with the invoice "to give an air of legitimacy but even repeat customers never see more than a proof of the advertisement," Winnipeg police say.

-- source: Det. Sgt. Kathryn Antymis court affidavit

William Murphy has for years been the director of four companies soliciting ads for four police-related publications that never existed, under the titles Police News of Winnipeg, Police News of Manitoba, Police News of Saskatchewan and Police News of Alberta, officials state in documents filed in the Court of Queen's Bench.

Manitoba's criminal property forfeiture unit quietly moved to obtain a court order in December temporarily barring Murphy from doing anything with bank accounts or property known to be tied to him or the publications. Officials allege they are either proceeds or instruments of unlawful activity.

Between July 2009 and May 2013, more than $90,000 was deposited in TD Bank accounts tied to Murphy, the province says. It asserts the money was garnered through solicitations for advertisements in the bogus newsletters and was "converted to personal use."

'The amount of money that flowed through William Murphy's various accounts... leads me to believe that the amount of loss to the various victims will be well over $100,000'

-- John Ormondroyd of the forfeiture unit states in a sworn affidavit

"Approximately 140 businesses have been identified that paid for advertising in the publications... some businesses paid for advertising multiple times, some over multiple years," the province states.

"The amount of money that flowed through William Murphy's various accounts ... leads me to believe that the amount of loss to the various victims will be well over $100,000," John Ormondroyd of the forfeiture unit states in a sworn affidavit.

At the time of the court application, police had been able to confirm 70 victims with a loss of just under $70,000, Ormondroyd stated.

Murphy has not yet filed a statement of defence and the allegations made against him are unproven. Provincial court records show he is not currently facing criminal charges. A message left for Murphy on Wednesday at a telephone number associated with Police News of Manitoba went unreturned.

The province's bid to freeze Murphy's assets comes in the wake of an extensive Winnipeg police commercial crime investigation that saw local officers reach out to colleagues in Regina and Calgary for assistance putting pieces of their case together.

The months-long probe -- dubbed Project Glutton -- got underway April 29 after police received a handful of complaints relating to attempts to sell advertising for Winnipeg Police News or Police News of Winnipeg, Det. Sgt. Kathryn Antymis states in an affidavit obtained by the Free Press.

Antymis says she reviewed several internal police reports, including one involving a Churchill excavation business that reported paying $3,143 to advertise a number of times in Police News of Manitoba, but never saw a copy of the magazine. The cheques were addressed to a building at 814 St. Matthews Ave. in Winnipeg and were deposited to a TD Bank account, she stated.

Antymis said another officer drove by the building found no signage in its front or rear and the windows and front door covered with white plastic from the inside.

Another officer spoke with a man who said about 10 years ago he worked at the building for two days, "calling people to sell a police magazine." He described how "he was part of a group of six-eight people working the phones," and "did not remember seeing any printing equipment," states Antymis.

The man told police he grew angry at the man who hired him, a James Murphy, for not paying him and was charged with mischief after he smashed his car window, the documents state.

Police obtained warrants from a provincial court judge allowing them to photocopy any mail sent via Canada Post to the St. Matthews address.

"Based on the mail examined, 20 potential victims were identified," said Antymis. Three of the businesses -- including a family resource centre for military members -- said they had advertised with Police News but had never seen the publication, she states.

A police-obtained production order for bank records for a numbered company operating as Police News of Manitoba showed between July 1, 2009, and May 21, 2013, nearly $88,000 in cheques valued at $199.50 each were deposited, Antymis stated. They were written by about 200 provincial businesses, she added. In that same timeframe, more than $90,000 was transferred out of this account into other TD accounts, she said.

"Upon examining the bank records, it is my opinion that the funds in the account were not spent in a fashion consistent with paying bills or business expenses, but rather transferred out of the account into another held at the (TD Bank) consistent with converting these funds to personal use," stated Antymis.

Republished from the Winnipeg Free Press print edition January 2, 2014 B1

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