Faces of Fraud: Cases and Lessons from a Life Fighting Fraudsters

Chapter 10

Cruise to Nowhere

There are times as a fraud investigator when you have to put yourself in the shoes of victims and look directly into the faces of fraud. That is exactly what two federal agents and I did to solve a fraud case that was targeting individual consumers and credit card companies. The fraudsters in this case were selling vacation cruises to select individuals throughout the United States. The promise was a vacation of a lifetime that turned out to be more of a nightmare. For the great majority of victims, this was a cruise to nowhere.

The Federal Trade Commission believes that Americans lose $12 billion a year in travel fraud schemes.¹ In the 1980s, Florida was the center of fraudulent vacation cruise scams. These particular schemes sold an unsuspecting public misrepresented, and often non-existent, cruises and vacations at grossly inflated prices. As a result of aggressive investigations and prosecutions, some of these operations moved out of state. Some relocated to states such as Tennessee and New York. National Clearing Center was one such company. One of the owners of National Clearing Center had worked in a Florida boiler room and learned the business, so he decided to set up a similar operation in New York in the late 1980s.

Description of the Fraud Scheme

National Clearing Center (NCC) was set up as a traditional boiler room operation. It had a low-budget sales office in which banks of telephones were installed and where salespeople worked from scripts ...