The phone calls would be placed in the evening to small towns across the country. "Hi (name), this is (salesman) with the Resort Exchange U.S.A. I'm calling to give you some good news . . . can you stand a bit??? (get response). (Name), you still have a current Visa or Mastercard, right??? (If yes, continue. If no, thank you. You don't qualify, goodbye) . . . Because as a current card holder you're going to receive one of five awards worth up to $3,000. . . . So congratulations."
According to the U. S. Department of Justice, that's how one of the most sophisticated credit card boiler-room scams in California would begin, with salesmen reading from a prepared script to the person who answered the phone.
Laurence Jack Brandon, 58, was the alleged mastermind who operated 21 companies, mostly out of a Hollywood office that was effectively shut down when government agents raided it in January, 1986. The government filed suit against Brandon, claiming that he routinely put through unauthorized credit card charges, leaving behind a paper trail of $1.7 million in bad credit card drafts with 11 banks in five states, including the Bank of Granada Hills, plus other local businesses, including a Tarzana travel agency.
"Brandon is considered one of the premier boiler-room operators in Southern California," said Richard Small, of the Justice Department's Los Angeles strike force.
Brandon, who is 6-3 and 240 pounds, has a soothing voice on the telephone. A mention of Small's name, however, triggers a burst of anger. "Lies and distortions," Brandon said about the government's charges in an interview. Brandon said he operated "above board and legal. I'm not saying we had not caught salesmen at different times misrepresenting things. And fired them."
Four Years in Prison
Whether Brandon was actually a credit card fraud artist, or simply ran a company that sold merchandise that left behind more than a few unhappy customers, his case offers a rare insight into how telemarketing firms use a carefully scripted pitch to net what Brandon calls the "impulse sale." It also points out the potential peril for banks and businesses that accept large volumes of unsigned credit card drafts.
If the government had a major, crackerjack fraud case against Brandon, however, it never got to trial.
Last May, in an agreement with prosecutors, Brandon pleaded guilty to two counts of a 29-count indictment. The offenses were relatively minor--using illegal long distance telephone access codes pirated from U.S. Sprint. He also pleaded guilty to possession of two guns in his home, which is illegal because he is a convicted felon. He served 15 months in prison during the mid-1960s stemming from a mail fraud case.
Small said the government accepted Brandon's pleas to save the expense of a lengthy trial. But as part of the plea bargaining, the government asked U.S. District Judge Stephen V. Wilson to order Brandon to repay $1.7 million that prosecutors say Brandon owes the alleged victims. Wilson, however, said the circumstantial evidence wasn't strong enough to link Brandon with the credit card fraud allegations. That could be dealt with in civil suits, he said. And so, on Oct. 26 Wilson sentenced Brandon to four years in prison.
Brandon must report to prison by Dec. 1, but he isn't through with the courts. He faces at least eight lawsuits filed in Los Angeles Superior Court by banks and businesses who claim they were stuck with Brandon's bad credit card drafts. Complainants include Bank of Granada Hills (which claims a loss of $36,000), Bank of Orange County ($261,000), Redwood Bank ($178,000), and Farmers and Merchants Bank ($43,000).
Another who has filed suit against Brandon is Richard Decker, a Northridge resident and former president of the now defunct Travel Management Systems in Tarzana. The company, Decker said, was driven out of business as a result of $125,000 worth of bad credit card charges rung up by Brandon in two months.
In court papers the government said the $1.7 million didn't "vanish" and tried to produce evidence that Brandon had access to large amounts of cash. Where is it? "We made some attempts to find it. It's not as easy as it looks on TV," Small said.
Nonsense, said Brandon. "There was no money taken. Every dime went into the company," he said.
During his palmier days, Brandon said, his business showed a $180,000 a year profit on $2.5 million in sales. Brandon paid himself $2,500 a week. Now, Brandon says he is broke. He was defended by a court-appointed attorney and his various firms have long since gone bankrupt.