Fraud Arrest Made in Boiler Room Probe

SANTA ANA — A task force targeting telemarketing fraud in Orange County has arrested a Newport Beach man as part of its investigation into a boiler room operation that preyed on elderly victims under the guise of helping to locate missing children.

Wayne Lewis Guenther, 31, was being held in lieu of $50,000 bail after his initial appearance in federal court in Santa Ana late Wednesday. He pleaded not guilty to a complaint accusing him of committing mail and wire fraud by seeking money with promises of huge cash prizes that never existed. A hearing is scheduled for Oct. 8.

The complaint alleges that Guenther bilked victims nationwide of $2,500, but that figure “will grow substantially” as investigators review records seized in raids of his home and business, said Assistant U.S. Atty. S. Robert Raskin.

Sheriff’s deputies said that, so far, they have found that victims wrote checks ranging from $125 to $700 each.

Questions arose late Thursday, however, over whether Guenther profited from his scheme or simply used unauthorized and possibly illegal tactics to raise funds for the Nation’s Missing Children Organization, a Phoenix volunteer group that helps those with missing children work with police and process paperwork.

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Guenther apparently was authorized to act as a fund-raiser, said Mitchell Gold, who operates U.S. Marketing in Santa Ana. U.S. Marketing has a contract with the charity to seek donations from the public.

Gold said he had retained several telemarketers in the area to raise funds and that Guenther worked for one of them, Charitable Fundraising Systems. Gold said that money Guenther solicited went to the Phoenix group.

Kym Pasqualini, founder of the Nation’s Missing Children, said that under contracts with U.S. Marketing and two other telemarketing firms, the companies are supposed to identify themselves as fund-raisers when they seek donations. No prizes are offered.

But FBI agents and Orange County sheriff’s deputies said that, whatever role Guenther may have had, he was operating alone in the scheme outlined in the criminal complaint.

Guenther was arrested after authorities searched his home and his Anaheim business. Sheriff’s Sgt. Dennis DeMaio said investigators found numerous items that Guenther used in his telemarketing scheme, including his pitch to those he called.

Guenther would tell victims that they had won “huge sums” that would have a great impact on their lives, said Sheriff’s Detective Adam Powell. Then he would have them send him checks made out simply to Missing Children.

“He was pretty good about not giving any specific amounts on these prizes,” Powell said. “And he’d segue into what they had to send without explaining what he needed their money for.”

Most of the people believed they had to make a donation to get the prize or that they had to pay some fee first, he said.

The arrest resulted from efforts of the County of Orange Boiler Room Apprehension task force, or COBRA, which was formed early this year to combat fraudulent telemarketing schemes prevalent in the county.

With the Guenther case, COBRA has two cases pending and has won convictions in two others. It is investigating 37 boiler rooms operating under 56 names. Raids also have netted eight arrests of people on warrants in other cases and on drug possession charges involving drugs found in the raids.

Those who believe they are victims of telemarketing fraud can call the COBRA hotline at FBI offices: (714) 542-8825.