The Crime of Telemarketing Fraud - California Business and Professions Code 17511.9
Anyone with a publicly listed phone number, and likely many individuals without one, will be familiar with the experience of receiving either a call or a voicemail from someone attempting to sell a product or service.
Telemarketing is one of the annoying realities of modern life. Recently, however, there has been an escalation in fraudulent scam calls targeting vulnerable citizens. The substance of the scam can vary dramatically.
Telemarketing fraud is a type of white collar criminal fraud in California when someone uses a deceitful or fraudulent business scheme in an attempt to sell something. In some cases, the caller will claim to be calling from a government agency such as the IRS or Social Security Administration and state that there is an ongoing investigation or imminent lawsuit.
The victim can avoid severe government penalties, the caller will claim, if they will only provide their confidential information such as social security number, bank account information, or credit card number over the phone.
In another common scam, the caller will claim to represent a software or computer company and warn the victim of a deadly computer virus which only the caller has the power to cure, for a nominal fee of course.
Once the victim goes to a webpage directed by the caller and downloads seemingly innocuous software, the victim will discover too late that they have given control of their computer to the scammers and potentially exposed all of his or her sensitive data to the world.
To give readers a better understanding on telemarketing fraud laws, our California criminal defense lawyers are providing a review below.
Definition of BPC 17511.9 Telemarketing Fraud
California Business and Professions Code Section 17511.9 defines the crime of telemarketing fraud:
Any person including the seller, salesperson, agent the seller, or independent contractor, who willfully employs any device or scheme to deceive in connection with the offer or sale by any telephonic seller, or willfully engages in any act or business practice which operates as a fraud or deceit upon any person in connection with a sale.
California BPC 17511.9 targets this and other related conduct which falls under the category of telemarketing fraud. To prove a charge of telemarketing fraud under BPC 17511.9, the government must prove the following elements of the crime beyond a reasonable doubt.
- The defendant must be a salesperson, agent, or representative of a seller of a good or service.
- The defendant must use a device or scheme over the telephone in connection with an offer to sell said good or service, or
- The defendant willfully, directly or indirectly engaged in fraud or deceit over the telephone to attempt to sell the good or service.
Synthesizing these elements, we see that BPC 17511.9 is directed at individuals who use the telephone to either sell something through a device or scheme, or engage in fraud or deceit to sell something.
The term “fraud” in the context of BPC 17511.9 is described an act resulting in an unfair benefit for themselves and causes harm or loss to another person. A related California offense is Penal Code 653(m), annoying phone calls.
Penalties for BPC 17511.9 Telemarketing Fraud
Telemarketing fraud under California Business and Professions Code Section 17511.9 is a “wobbler,” meaning that it can be prosecuted as either a felony or a misdemeanor. The decision on how to file the case is based on the circumstances of the case and defendant’s criminal history.
Even if initially filed as a felony, the charge can later be reduced to a misdemeanor in some circumstances. A prefiling intervention on behalf of a suspect who is under investigation for telemarketing fraud, even if a felony arrest has already taken place, is therefore critical to maximize the chances of reducing or even dropping the charges before court.
A misdemeanor violation of BPC 17511.9 carries the following penalties:
- Maximum penalty of one year in the county jail
- A $10,000 fine, or both the fine and imprisonment
A felony violation of the same section, by contrast, carries the following penalties:
- A sentence of 16 months, two years, or three years in the California state prison,
- A $10,000 fine, or both.
Readers should note that the $10,000 fine is applied per violation of the statute. This means that a defendant who engages in a large amount of fraudulent calls in an attempt to deceive victims can be fined hundreds of thousands or even millions of dollars if convicted under BPC 17511.9.
Fighting BPC 17511.9 Telemarketing Fraud Charges
As in all fraud offenses, the central question will be whether the defendant had the intent to commit fraud, that is the intent to obtain something to which the defendant is not entitled by means of misrepresentation, deceit, or dishonesty.
Simply exaggerating the usefulness of a product or service or aggressively marketing a business is not fraud, though it may be an unfair business practice under civil law.
To commit fraud, the defendant must know that they are tricking the victim into purchasing a product or service which either does not exist, is not what the defendant claims it to be, or in the case of the computer virus example above, for instance, is actually intended to harm the victim under guise of providing a valuable service.
Another potential defense is to make an argument was not a salesperson. Recall from the elements of the crime that it must be proven defendant was acting as a salesperson, or agent of the seller. Perhaps we could make a reasonable claim defendant was not attempting to sell anything.
If you or a family member is under investigation for, has been arrested for, or is already charged with telemarketing fraud under Business and Professions Code Section 17511.9, please contact our experienced team of Los Angeles criminal defense attorneys for an initial consultation. We will work with you, including through a prefiling intervention, to maximize the chances of a successful outcome in your case.
Eisner Gorin LLP is a top-ranked criminal defense law firm located at 1875 Century Park E #705, Los Angeles, CA 90067. Our main office is located adjacent to the Van Nuys Superior Courthouse at 14401 Sylvan St #112 Van Nuys, CA 91401. Contact our firm to review your case at (310) 328-3776.