Transcripts For CSPAN2 Tonight From Washington 20120310

opening remarks, federal and state law enforcement officials discussed different types of stamps, elderly, tax return, and taxes opportunitying. they talked about what the obama administration designated as consumer protection week. this is just over two hours. [inaudible conversations] >> all right, thank you, ladies and gentlemen, good afternoon, and thank you, all, for being here today. i'm michael bresnick, financial director of financial fraud and task force, and i thank georgetown university law center for hosting this very special event that we've had and are having here today. with so many influential leaders throughout the department of justice and, in fact, from more than 20 different federal, state, and local law enforcement agencies and offices as well as nine different consumer protection groups, gather together under one roof to talk about critical issues that effect millions of americans all across the country every day. four weeks ago today, united states attorney general eric holder announced the creation of consumer protection group punctuating his deep commitment to preventing and prosecuting fraud against the most vulnerable citizens. during his time as attorney general, he's charged civil attorneys and criminal prosecutors to use all the resources in their arsenals to enhance their enforcement of consumer fraud. these efforts have been met with tremendous success. under his leadership and fierce resolve to protect consumers, we forged strong partnerships with consumer advocates here today and continue to do so with the consumer protection working group and events like this one. ladies and gentlemen, it is with great pleasure and honor for me, now, to introduce this afternoon's first speaker, united states attorney general eric holder. [applause] >> well, good afternoon. good afternoon. >> good good afternoon! >> there we go. [laughter] the executive director of the financial fraud task force, doing a great job. pleasure to join with you and so many dedicated colleagues and potential partners as we begin today's really important conversation, and so i want to thank you, all, especially the distinguished panelists of being part of this us -- historic center. there's no better way to raise awareness through joining forces in examining the challenges we face in identifies the solutions of the american people. 234 this conversation, i'm especially grateful for the commitment and engagement of the members of the consumer protection working group, a newly formed initiative opening as part the financial fraud task force, and in particularly, i want to recognize director michael bloom and all the group's co-chairs and tony west, soon to be the associate attorney general, assistant attorney general of the criminal justice department, and andre of the central district of los angelesment director of the ftc's bureau consumer protection and head of the financial bureau's director of enforcement of the today is the working group gathering for the second time since the meeting in february, i want to express my gratitude for your leadership of the effort and for your dedication in protecting the health, safety, and economic security of consumers across the country. these are foals and responsibilities that we all share, and each one of us has a role in fulfilling them. for me, and for today's department of justice, protecting american consumers is a top priority, and as we have rededicated ourselves to the work in recent years, a also learned some potential lessons, primarily that fully understanding the debt that consumers face and preacing interests in a comprehensive way is not something that the justice department can achieve on its own. we cannot simply prosecute our way out of this problem. we need your help, your perspective, your expertise, your talents, we need your determination. that's precisely what this day is all about. earlier, this afternoon, we kicked off an important, and i think in some ways unprecedented conversation between the working group's leaders and key consumer advocates talking about strategy for enhancing our civil, criminal enforcements of consumer fraud crimes increasing public awareness of schemes and ways to report them that ordinary citizens have the knowledge they need to fight back and building on the moe men numb established in the fight of the consumer fraud. as a result of discussions like this one, and thanks to the partnerships we have forged, the federal law enforcement officials, regulatory agenciesing as well as key, state, and local authorities, they gain access to the wide array of tools and extraordinary depth of experience that we will need, not just to continue the work that underway, but the things that go to the next level, especially in these times of great economic challenges. i recognize the need to move aggressively to combat these crimes has never been more important. that's why i'm proud to report our nation's department of justice and so many of the consumer groups represented here responded to the threats with not just dispair, but resolve and decisive action. in the last fiscal year the branch had 95% conviction rates. they uncovered more than $900 million in criminal and civil find, and they had seasonses and more than 0 -- 30 individuals. they have the remarkable success of the fraud and enforce. task force to have convictions against those responsible for a wide variety of consumer scams like telemarketing schemes, referral services, and those who joan rated over $75 million in loss and victimized 50,000 small businesses by unplacing unauthorized parties on people's phone bills. since last april when i established a new part of the task force known as the oil and gas price working group, focused on identifies civil or criminal violations in the oil and gasoline markets and ensuring that american consumers are not harmed by unlawful conduct. the latest meeting held at the justice department just this morning and members discussed a variety of topics including the speculators in the market and enforcement matters by viers working members like the attorney general's office as well as ways to improve chairing between members and partners, and here we go. reporting the numbers, the federal trade commission is conducting an investigation, tans, from other working group members into where gas prices have been affected by anti-trust or market manipulation by refiners, producers, transporters, marketers, financial trader, or others working with members ready to act if the ftc learns anything, and the task force at the fore front of the efforts to seek justice for those who were devra devastated by the recent financial crisis. since 2009, they brought charges, secured convictions, and charging securities fraud, bank fraud, and investment fraud and criminal enforcement tools where possible and civil penalties and sanctions where knees. i think we made great successes in holding institutions and individuals accountable for the wreckless and unlawful conduct that contributed to the financial crisis, and e employing a similar collaborative approach, we have been able to make history. the departments of justice and housing and urban development and other agencies and 39 other attorneys generals came to make an agreement with the nation's top 5 mortgage services. the largest joint, federal state settlement on record. this provides significant assistance to struggling home owners and communities, and it serves as a model for what we can accomplish when we work together across federal agencies, state boundaries, and even across party lines. another new task force component known as residential mortgage backed security working group. now, we can be encouraged by the achievements that characterized the past few years. there's no better illustration than the progress we've made on the ground breaking work to prevent health care fraud. some of the last fiscal year alone, the department and partners uncovered $4.1 billion in funds stolen or taken improperly from federal health care programs. the highest amount ever recorded in a single year, and over the last three years, every dollar that we've spent fighting against health care fraud, we returned an average $7 to the united states' treasure, trust fund, and others. these numbers are stunning. there's no question. we should be proud of the results that we have already achieved. although the health care fraud is not a foe kl point on the ongoing working group, we have to augment our efforts, and i also know this is no time to be satisfied, and we cannot afford to become come place sent, -- complacent and that's why we continue to seek new avenues for communication and collaborations with partners like you. the assistance and expertise of the friends. and allies gathered here today and discussions that take place this afternoon with issues ranging from fraud with the eld ierly and witness opportunity fraud, we'll develop comprehensive strategies implementing new solutions to preventing and combating consumer fraud in the year's ahead. similarly, the colleagues and i counting on each and every one of you. american consumers depend on you, and i look forward to all we can accomplish together. thank you, all, very much for the great work that you do and that you will do. thank you. [applause] >> thank you, general holder, and thank you all of you for joining us here today. happy national consumer protection week. you know, we are -- this week is really an opportunity for us to do a number of things, to raise awareness about consumer protection issues with consumers around the country, to begin to speak about our own efforts, education efforts, prevention efforts when can comes to protecting consumers from frauds and scams, but the most important thing this week is proving to be is an opportunity for us to come together and to share ideas, thoughts, to achieve some synergies, talk about efficiencies we can achieve by working together, and we've already started to do that this morning. we had a very productive meeting with consumer advocates who have been in the fight for a long time, and with federal partners and state partners talking about how we can work better as a team tackling some of these issues. as the attorney general mentioned protecting the health, safety, and financial well being of consumers has really been a center piece of this administration's anti-fraud effortings, and over the last -- efforts, and over the last three years, we in the civil division of the department of justice, we've re-focused, re-doubled, and really re-organized our efforts to protect consumers by creating a new branch, the consumer protection branch, and the work of that branch, which the attorney general mentioned in his remarks, has been going on for the last 40 years. what we have done is to, and they enforce consumer protection statutes for a long time, but what we've done over the last three years is we have provided additional resources, we have given that branch an expanded focus, renewed partnerships with key players in the consumer protection space so that our efforts are even more effective today. we have great partnerships with the ftc and fda, the consumer private safety commission, new friends at the consumer financial protection bureau, state attorneys' general, great strong partnerships with u.s. attorneys across the country, and several others, and we have really, through these partnerships, stepped up our efforts to enforce consumer protection laws in a number of areas including mortgage fraud, food and product safety, counterfit pharmaceuticals, better business opportunity fraud, a panel on that later on today, criminal loss, marking, health care fraud, interest grows in for-profit colleges and other areas of growing interest fraud that preys on immigrant community, and as the attorney general mentioned, we doubled efforts that led to record-breaking results, a testament to the partnerships we've been able to establish. he told you about last year's nemesis. looking at the numbers from january 2009 you see the consumer protection branch and efforts uncovered a record-breaking $3.72 billion in criminal fines, civil penalties, restitution, the victims, when you add up the sentences of the defendants convicted during the 3-year period, you find it adds up to more than 295 years. it's a record of success, but we have more work to do and that's why this gathering is so, so important, and so last thing i'll say in closing before i turn it over to my friend and colleague, is that, you know, one of the things that happens in washington, d.c. when people hear a new working group is they think, oh, a new working group. what's that? what's there; right? [laughter] one of the things that i think we've seen time and again with the fraud task force and working roots formed under it whether it's mortgage fraud working group, which i had the great privilege to work on, or the rnbs working group or some of the other working groups that lanny participated in and we in the room participated on, the reason we form the groups is because they work. they have really led to very significant results when people come together, people who are focusing on similar enforcement challenges, and we are bringing together the full pan of federal and civil and criminal and state authorities that they are on these common problems, and you add to that in this context bringing together advocates, and we have a recipe for success again. pleased you are all here, it's a privilege to be engaged in the effort with you, and with that, i'll introduce the assistant attorney general of the criminal division, my friend and colleague, lanny brewer. [applause] >> willing to deal with the issues at hand, find comprehensive approaches. my view of the issues is to say to some degree wf different topic areas, but on some level, all levels of fraud and criminality working internationally and marked by the subject matter. right now with the working group to have real discussions with real experts, heard from people earlier today, and my criminal division will be better as a result because we'll start focusing and a very real example, i grabbed a deputy chiefs and a section based in the points made earlier today saying i want us to deal with the issue, and in the same way in the residential mortgage backed security group exchanging ideas with others, we came up with a holistic approach in a new area. what we need to do is we need to raise awareness. we have to understand the fraud particularly at too time of financial disstress when people feel vulnerable is a time when they feel at their most vulnerable and greatest risk of fraud. we also have to be realistic to crime's global and we have to be realistic more and more today organized groups sometimes perpetuate fraud. one of our goals, one of our goals in the criminal division and with partners are to identify who are committing the crimes and how are they committing them? one thing is crimes are not always internationally based. it's not always here. they can escape law enforcement if they do it abroad. we have to deal with the international partners, and in that vain, i go to west africa to talk about partners in west africa about what to do and fighting hard to extradite people when we identify them. it's why i was recently no romania to talk with partners there where romania's been a strong partner dealing with identity theft and fraud and the kinds of scams we're all here to talk about. one from my office is here and we identify with disaster relief fraud. since cay -- katrina we learned americans and others have huge hearts. when they say i'm raising money because of this calamity, can you just donate money? people do. we created at lsu a comprehensive approach, agents from all law enforcement entities and prosecutors and hot lines and it's worked. we have not eradicated it, but we prosecuted many, many people, received very high sentences, educated people, and just this week and last week with the tore -- tornadoes that ravaged the united states, we started a new educational campaign. as tony said, that's what we're going to do today, learn and try to learn more and more and educate those who are most vulnerable and in these times people are embarrassed they were scammed, embarrassed because they donated or gave money because they thought their life's partner whom they never met thought was their kin dried spirit needed money or an elderly person thought a relative or grand kid asked for money and so gave money, and, of course, it was furthest from that. we have to figure out how to help the most as a vulnerable. we identified criminals from the united states and other places where they go, and 24 hours a day they man phones from one consumer fraud after agencies and another. you won the lottery, send us this much money. a relative of yours suffered disaster, send us this much money. extradited those people, one sentenced to 30 years in jail, a group of others sentenced between four and ten years in jail, and attorney general said prison has to be a component. lastly in the partnership, the central district andre, we took down a group called or -- armian power, an organized violent gang that engages in identify theft and consumer fraud and through the schemes, we went after them and are prosecutorring -- prosecuting them and prosecuting their leadership. i, like tony, and happy to hear from folks today, keep moving forward, and keep holding those who perpetuate the fraud are responsible. thank you. [applause] >> we're the new kids on the block. i was thinking meeting with the consumer advocates that we probably, less than one year old, we have probably been doing this for about as many days for the collective group of people have been doing it for years, and so we're gratified to be invited to join in the efforts. we come to the table in these efforts and have a wonderful array of tools, and the objective is to think creatively about how we use that set of tools we've been provided by the congress. we have the ability to engage in supervision and enforcement and rule making, consumer engagement, consumer response, and all of these tools together, i think, help us be more effective in the way we do the work that we're all engaged in. the references made with the consumer advocates i thought yielded a good example of where that kind of collaborative activity is both necessary and justified. it was, i thought, striking in those discussions that the single topic raised most frequently in that group as to what was an area of concern was illegal and fraudulent conduct associated with debt collection. it was a topic over and over and over as we were talking earlier today. well, earlier this week, our director indicated in the speech to the state attorney's general that he thought this posed an opportunity and challenge that we should all collectively take on together, that there has been outstanding work that's been done respect to efforts to undermind illegal and fraudulent conduct associated with death collection. the fty brought more cases in the last year than any recent teem in anybody's memory might be ever, and they've done that in substantial collaboration with the justice department and united states attorney. the attorney's general across the country bringing cases consistently and regularly over the years, and yet in a meeting with consumer advocates today, the single topic that drew the most attention. what that says to us is we have to get together collectively to look for ways to do things in new ways, different ways, utilize tools, concepts, ideas about how we can try to bring about the changes we would all like to see, and not just this area, but the debt collection example is simply an example of the many areas we have to do the collaborative work others referred to, and so i want to indicate that we are both humbled and thankful about joining with all of these colleagues who have been working for substantial time on these difficult issues and the -- we have regimely appreciated the -- generally appreciated the welcoming and generous way we've been invited to fight against consumer fraud and consumer laws along with all of them, and with that and our commitment to bring the new tools, new energy, and our new resources to the table joining everyone, let me then introduce my friend, david, the drekder of the bureau commission at the federal trade commission. . [applause] >> i'm the director of the bureau consumer protection. kent is the new guy on the block, but we're the old guys on the block. ftc the oldest consumer protection agency with the consumer protection and competition data base. over the last three years, we focused resources on what we call last hour frauds. these are frauds aimed at taking the last dollar out of the wallets of people rendered vulnerable by the economic downturn. now, we do all sorts of things other than enforcement. we do rule making, policy initiatives, tremendous consumer work which is available at www.ftc.gov, but i want to talk about the enforcement cases because the commitment that tony spoke about earlier and attorney general holder spoke about earlier really deserves a moment of reflection. hive been doing consumer protection work for the last 35 year, and never before have consumer agencies involved in consumer protection met with advocates, heard them and made comi.ings that the -- commitments that the government is making today. tony's forces have grown exponentially. we have kent and the new cfbc on the block and we finally have the resources to play offense, not just defense. i want to talk briefly about the ftc's enforcement mission. when we bring enforcement cases, we have three goals. stop the fraud. find whatever money we can find and return it to consumers and refer it to lanny, tony, and andre, and hope the justice department puts these guys in jail. let me talk briefly about the breath of our enforcement work. as long as we're gripped with this economic down turn, people, homeowners will be in default or face foreclosure. that's a breeding ground for abuse by fraud steers. earlier this week, we filed our 35th case against hundreds of defendants engaged in loan modification scams issue and we'll continue to do this work at a high volume until we root this problem out. our emergency servicing, yes, there's -- our mortgage servicing, yes, there's a tremendously good settlement against the top five, more servicers out there who need to see the federal government. we're working, i know, i know the cfpb and department of justice working on these issues. a debt. debt is in terms of resources the largest issue we confronted, and we confront it in multiple ways. one is, there's a lot of debt settling scams. if you listen to the tv at night, here's the come-on. if you owe more than $10,000 worth of debt, call us, we'll renegotiate the interest, pay down the principle. most of those are scams. just finished a huge trial in dallas against two of the largest ones, more than 20 cases in the area where this is an issue that will not go away. debt, increasingly. people complain they are called by debt collectors, and they owe no debt. these are people who searched for payday loans online, and they get calls from call centers in india. we know where they are. trying to force people to pay debts they don't owe with threats of ayers -- arrest and imprisonment. we shut down ten in one case filed two weeks ago, and there's more of this litigation to go go. debt collection abuse is the largest single complaint we get at the federal trade commission. .. and we are very grateful to the justice department's help in this case. peaden lending abuse is on the rise and they are now putting offshore, or residing on indian tribes and claiming tribal immunity. we filed a big case against one of these tribal pilons operations last week. there's more to come. hushovd scams and business opportunity with the unemployment rate still stubbornly high. people out of work or working of extra pay, jobs and business the scams there's going to be a camel on that later this afternoon but we will talk about our work fink the government scams, a government grant scams still ongoing even though the stimulus program is over. we talked about this before, but wider fraud scams, grandparent scams, lottery sweepstakes, the are proliferating, but we are going after them not only by the schemers and then turning them over to the folks for prosecution but also going to the lawyer transfer companies that enable this. we have an order against money gramm. we've been closely working with western union to combat those frauds. precious metal scams, telemarketing scams, planning. i could go on and on, but our mission until the economy brightens is going to be going after these scanners shutting them down, taking away whatever assets we can and then turning over to the justice department so they become guests of state. thanks so much. [applause] what the introduce my colleague who's the u.s. such attorney and l.a. and as a good part of the ftc we are grateful for his work. [applause] >> good afternoon everyone. i bring who greetings from a warm los angeles. it is a privilege to be able to spend time with you this afternoon and i look forward to an engaging and learning a lot from you this afternoon. as mentioned in the united states attorney in the central district of los angeles and is the most popular district in the country representing almost 18 million people and with a district with so many consumers is home to a variety of targets and crimes and scams that you heard about today. some include your for closure or loan modification, scams that print on homeowners who have fallen on hard times, your loan schemes, the target the small businesses and our district importers of counter the goods who skirt safety regulations to sell to low-income neighborhoods, abusive tax preparers who target low-income taxpayers and scam the refunds and fraudulent immigration practices who charge based on false promises. as tony west mentioned. and i can go on and on about the different scams that go on in our district but i want to tell you we have been very proactive not only in the central district of california but termination and our colleagues throughout the u.s. attorney's offices have been working very diligently on this effort. our objective is relatively simple. to investigate these crimes, to educate the public about the scams, and to hold those responsible those individuals accountable. so let me give you some concrete examples of what these scam artists or michael thus, artists do on a day-to-day basis. just like begin this to the total for nitrogen identity theft and which the victim was of a stolen credit card and bank account numbers for more than 600 victims by sending out e-mails that looks like a legitimate banks asking for a data personal information. in january of this year, a father and son were sentenced to more than 150 months in prada rolph deily ka federal prison to pay $39 million in restitution for running a scam that defrauded more than 1,000 victims with the promise of large returns on investment in companies that were developing films and los angeles. last month a corporation in los angeles was ordered to pay the fine of a million dollars because they were mislabeling and pawning off as groups accelerating it throughout the country. and then last year a santa barbara man was sentenced to six years in federal prison for conducting a phony secret shopper business an opportunity scam that included offers to make people bartenders in our district was trotting 87,000 victims and the district to the tune of $6 million. now, those are just some examples that we've had in the courtroom for our victories in the courtroom are not all that we need to do as it relates to combating consumer fraud. in the coming weeks and months you will see u.s. attorney's offices throughout the country working with our partners both on the civil side and the regulatory side, and consumer groups to deal with these issues. in many cases we have prevention as a counter, and we want to provide the consumers the tools they need and educate them as a scam that is going on here throughout the country and the only way to do that is the working with good people like you today to exchange information can't educate each other and hopefully develop some strategies to go out and target the federal counter it going on throughout the nation. the good information we receive and as mentioned earlier the information we receive in the early session was quote productive and informative and i have a lot to bring back to my district something of a different game plans and i will share that with my colleagues throughout the country so i look forward to hearing from all of you today and i look for to the great work we will continue to do to ultimately achieve the goal of protecting our consumers. thank you. [applause] >> thank you. david, tony come and now other than david if you don't mind telling our panelists to come at this stage and began began with the next portion of the summit. the summit will be a panel from the elderly, the moderator will be michael bloom of the consumer branch of the civil division. the panelists will be david you just heard from, elizabeth, the director of consumer and state affairs at aarp, naomi from the office of older americans consumer financial protection bureau, jonathan roche, the chief policy and the criminal division of justice, jeffrey steger from the civil division of the department of justice and abby kuzma the attorney general. with that i give you michael bloom, our moderator. [applause] >> thanks and good afternoon. this panel i suspect will be interesting and informative and let's get right to it. we are going to talk about fraud directed at the elderly, and it seems to me and natural question is why do we have a special panel on fraud on the elderly, and there is research that concerns particular vulnerabilities that older folks may have that need them more susceptible than others to a certain kind of fraud, and i would like to start than with betsy about some of the research that the aarp may have done concerning those kinds of full abilities and if you give us some of those overly financial abuse is dramatically underreported. maybe 24 people are victimized for every one that is reported to a criminal or social service agency, and it's probably the most pervasive forms of elderly abuse and mistreatment. new york did a survey of people that were 60 and older and 41 out of a thousand had suffered this type of abuse and this didn't include people who were cognitively impaired which i will get to minute. they serve over people and their children and found that 20% of those over 65 had been taken advantage of financially through an inappropriate investment and hi-fi's or outright fraud so the lawyers coming in for civil rights shows that 45% of the scam victims were over 50, and they included 41% of losses with the foreclosure rescue scams. one thing which we have not been able to research, it just hasn't been out there is better statistics on how this. met life had a report the estimated at least half of $3 million, billion, excuse me, had been lost, and 51% of it was embezzled by strangers and 34% by family friends people in the same church or neighbors, people they knew. and i'm looking forward to the business opportunity fraud because a lot of older people have lost their jobs and they've been unemployed for longer than they've ever been before. so, we have done research coming and my friend naomi karp is going to talk about one of the reports because this efp stole her she did work at a rp and basically wrote the report, but it's called protecting older investors, the challenge of the diminished capacity, it's out there in all, both of the whole report and then if you want a short version of it that's also there, and a survey and summarized some of the data and tried to find out what financial advisers dealing with clients directly and the compliance officers have they tried to handle the problem on the investment side, and i know that the only will carry this further. i don't always have good news to bring you. we had a very well-designed project that came out of the west virginia office where they bought these lists. these are the same. i don't know where they come from. that's something that should be investigated. i used to be the new but they are much broader now. so the aarp volunteers were given these lists they called the people 11 to one and spent time trying to train them to resist telephone fraud, stranger fraud, and they tried various methods and the found the one that seemed to work the best was giving them a strategy to respond at each step of the fraud, and they did try, it took a lot of people to do this even though we were using volunteers, and they wanted to see if they could teach those on the phone to resist scanners. they did find that compared to a control group, when there was a camera calling them up they were more resistant, unfortunately six months later they weren't. so there was no longer a difference between these groups. so, we clearly have to keep educating people. we have to educate the families and the communities in addition, but we also have to try as all these people are doing to stop the fraud before they get their because many of these people just do not know how to resist it, and i think that, you know, one of the issues we have is it's not only people that may have diminished capacity the first thing that tends to go is their ability to handle their financial affairs, at least people with pre-alzheimer's disease. they're also hasn't been much research on this about being more trusting, but it's hard because there's some people that seem very resistant to this. i was just reading the "washington post" yesterday, and i think john kelly said this best. he's talking about a greenbelt scam but it doesn't mean go for it. he does the usual if it sounds too good to be true it is. i've been doing that for 30 years. that is when a stranger calls to say you win something you haven't. pass down that flutter of excitement, listen to the voices. why would someone call you out of the blue to tell you you have run a sweepstakes you didn't even remember entering, sadly enough people listen to the other voice, one that says why shouldn't lock smile upon me once in awhile. do i not deserve the universe love and they make a decent living. so, we have a real issue in terms of trying to prevent it other than through the great work of law enforcement. >> that raises the question and i will give this to you. why would it be that older folks may say why, something about them perhaps to talk about some of the research, libeled older folks think that perhaps more so than others? >> thanks and it's a pleasure to be here to the i guess i wanted hookin' bull but generally about that question about why our older people targeted, and why are they particularly vulnerable and then hearing a little bit more on what betsy mentioned about the diminished capacity and the research that we have done, so the research shows there are quite a number of reasons that older people are targets of fraud and financial exploitation to include this is pretty basic. they are the people that hold the largest portion of the wealth in the country so even though individually many of them may be poor that's where the money is and that's where the scam goes. it may be that they are more trusting and they are more unsophisticated about financial matters. there is often a presumption that they are more vulnerable and not targeted because they are perceived to be more vulnerable, and they may in fact be more vulnerable due to the cognitive impairment. also many older people are more isolated, and thus they are more dependent on helpers of a whole great access to their money and to their documents, so you know, these are crimes of opportunity. suggest to zero in for a minute on the diminished capacity because i think with the age boom and with people living longer, more and more people are having cognitive impairment and diminished ability to make decisions including financial decisions and we have family members, the financial-services industry, all kinds of industries and professions saying my god, we had this coming. we don't understand it and what are we going to do about it. so capacity decision making capacity is really not an all or nothing thing. it's made up of a number of types of capacities. we have capacity to make personal decisions about your everyday life, the capacity to make health care decisions, and then capacity to make decisions about financial transactions. and what we have learned a house devotee said is the financial capacity that's been called the canary in the coal mine of capacity is really the first to go and it's made up of a number of skills and includes your basic monetary abilities, you're identifying and counting money understanding debt and loans, conducting cash transactions, paying bills, and then i must underline this last one because this year as ecologists have done research and identify this, one component of the financial capacity is maintaining judgment to act prudently and avoid financial exploitation. you can see when financial capacity starts to go people become more vlore beebee carvel rebel come and the population numbers want to throw off numbers that you they are pretty astounding. declining financial skills start to happen when people have my old cognitive impairment, not even full-blown alzheimer's disease. 22% of americans aged 71 to older have mild cognitive impairment, so that is a lot of people. one out of eight people 65 and older has full-blown alzheimer's disease. so we can see where this is going. let's bring it closer to home with an example. dad seems fine. he's still handling his bank account, his brokerage accounts and then the bank teller sees him perhaps making and on characteristic withdraw or having multiple overdrafts or the broker is getting calls to cash in his conservative investments and to buy shares in a risky start up that he just heard about from his new best friend. as we all know and many of us have had personal experience that it's really hard to take away the car keys when his reflexes are getting slow or his vision declines. but one day we fear that his car will hit a child crossing the street, and so we do something about it. similarly, we don't want to take away mom's financial driver's license, and then we see mom being taken by a lottery scheme by teeing and inappropriate in devotee after attending a free lunch seminar or getting ripped off by her home care eight. so you can see that we have a huge challenge. i will just talk quickly about the research at aarp public policy institute that betsy talked about. it was in the investors sphere, but we surveyed the front line financial let visors, broker-dealers and also their compliance officers about deutsch the understand the diminished capacity, do they see it as a problem, to the of protocols in the firms to deal with? are they worried about financial exploitation? what do they need? and the message was loud and clear. yes, they see it as a problem almost all of them recognized. some of them have protocols, but the particles were all over the map. they overwhelmingly said we need training on the diminished capacity. should be mandatory but our firms don't require at, so i think it's interesting that there is a recognition, but yet we don't have the tools and we are all going to have to start working together to create them. >> one of the scams you mentioned was the lottery scam. as well as others can you talk about a lottery scam is with a focus on how the scanners used some of their vulnerabilities that bettini and naomi talked about and how to use the from their advantage. from the consumer protection branch we are currently participating in a number of investigations involving watering scams that are emanating from jamaica and preying on citizens in the u.s. mainly elderly people. essentially the scanners will call potential victims and the u.s., including many elderly people and form the potential victims that they have one cash and prizes, sometimes cash and a mercedes, typically a car, but mostly money. we are talking about millions of dollars that these people are told that they one and indicate that the winnings will only be delivered once an individual's pay upfront fees, taxes or insurance. dictums end up sending the money through wire transfers through entities that david mentioned earlier through the western union, through money gramm, through the value cards, the green bought cards that betsy mentioned, and that money will ultimately be sent down to jamaica. our office is currently in the middle as i mentioned involved in a number of investigations i just want to get a profile on five recent victims that we have talked to meaning in the last couple of weeks and i'm going to be generic because these are obviously ongoing criminal investigations. one is a female early 70's. she was working at the time, she was living alone and received a call that she had won a sweepstakes prize of three to $5 million. during the conversation, the initial conversation the roster was most interested in knowing from her what it felt like to win the lottery, and that was essentially to gain her trust. over time they had many conversations, many e-mails, he was able to get her trust, and she ended up sending tens of thousands of dollars and wiring tens of thousands of dollars which ultimately, we believe, ended up in jamaica. the second victim, a female in her late eighties living at home alone in a small town she acknowledged that she enter sweepstakes at times. she was called at least 12 times in a two and a half weeks period indent about wiring money to them. a third victim, a male in his late seventies, early 80's, he was a widower, lived alone in a small town. he was an owner of a small business during his career and he was a victim of this type of lottery scam. for the victim, female in her 70's lived in a small-town, lived alone, acknowledged that she enter sweepstakes such as publishers clearing house, and she was victimized by multiple groups over a period of several months, and she why your money to them. she got suspicious after she didn't get her winning but they offered her an excuse saying that because her fees are not coming in as quickly as they had anticipated that her winnings are being delayed and that is how she continued to get caught up in the scam, and finally a fifth victim, a female in her early seventies against live in a small town. they sent her a check to purportedly pay the fees that this was going to be advanced. she deposited the check and she immediately or shortly thereafter withdrew the money from the check and send it out. the check bounced and so she was out that money. to put a little bit more meat on this profile, these people that we have been talking to most recently, they are elderly but they are not in their nineties, they are not in nursing homes, they typically people better living alone. the independent, they have some disposable income, but not a huge amount, so after a couple of weeks when their disposable income is gone, it's not unusual that they would take out a loan on their house or more typically for typically they would take a cache of fans on credit cards. to talk about your profile little bit more, the scanners who in these investigations are from jamaica, they will call these individuals more than perhaps their family members will call them. >> let me stop there because i think that goes to something we were talking to jonathan about. what's striking about or comment to me at all these individuals is they were living alone and that perhaps part of what the draw is to these folks is they have somebody to talk to come and that goes to something called imposter fraud that i know you may have heard this from flavors of it so to speak but if you talk about imposter fraud and what they are and also talk about your work internationally because it's being wired internationally, and perhaps there are frauds similar to ours. >> let me talk about imposter fraud and as mike suggested shot up the broad ramifications of the types of mass marketing fraud might suggest it, our office and several u.s. attorney's offices as well as our federal investigative agency partners have been working on. imposter fraud can fall into a couple of different categories. one of them that has gotten a lot of currency lately is known as recently as the grandparent scam. we first heard about this several years ago in japan where this is fundamentally the same as we hear about today in the united states. people get lists of other stickney senior citizens or call these people cold and when the phone rings to get at the end of the from the person says it's me , and depending on whether they know that they are calling in alderperson, obviously it won't work in every instance the oftentimes the person will say if it happens to someone in the united states, johnny is that you? and that's all they need. yes, it's me. i'm so glad i got you to ray - arrested. i am here and fill in the country. i'm here in france, and here in the netherlands, i needed bail money. can you possibly wider me some money? or i've been in an accident. i need money. i have to pay the hospital. can you send money to me right away? naomi talks on the issue of different kinds of vulnerabilities that may stem more from the new biology. these are the types of scams that you could understand what readily play on the heart strings of anybody who simply makes a mistake and never anticipates the possibility that some would be calling them up with this specific purpose of lobbying from the very first words of the conversation to get money from them. so, they responded in the way they think the need to to help out their loved one, grandson, whoever, and only later on to the find out the the thousand or $1,500 to just what your somewhere didn't go to their grandson, it went in the pockets of the fraud stirs. and as for other types of imposter scams, the grandparent scam is a sort of a variation on things we seen increasingly common on just in the united states, but from other venues around the world. about ten days ago the royal canadian police made the arrests in the montreal area of several individuals who were engaged full-time in the grandparent scam specifically targeting older americans. why is it if they would be doing this? first of all, for a long time, u.s. law enforcement has recognized that there's been often a two-way trade you might say on fraud between the u.s. and canada going back as far as 1998 a series of regional task forces were set across canada with u.s. and canadian participation to work, telemarketing fraud and other types of mass marketing from collected basis, and all of our major partners and consumer fraud ranging from the federal trade commission to the fbi, the postal inspection service, the secret service have all participated in different ways of these task forces. well, the frame of reference has changed. now when jeff talks about and why your flawed know, she didn't say as we might have a number of years back south florida or southern california. now it's costa rica, jamaica, the dominican republic and four fairfield, spain and other parts of the world. in part because we have seen and the assistant attorney general's remarks highlighted this as well. as we have seen the globalization of crime in general, the globalization of fraud, including the globalization of techniques, when we first started to compare notes with our law enforcement colleagues going back probably four or five years ago in australia, canada, the united kingdom, and even nigeria, we started to find that we were talking about the same kinds of scams with the same kinds of techniques targeted against the same kinds in many instances of senior populations often as well by the same groups of people. so part of what we sought to do, and i think it's fair to say that mike's office fraud section and the u.s. attorneys have focused on this particularly what we are trying to do is take our ability to respond to these types of fraud directed of older americans to the next level where we share information with each other about who for our respective investigations and intelligence we figured or the main players behind the schemes. or they watching the schemes from, where are they getting their lists from? how are they recruiting, how they organize? where are they moving their money? more and more. what we focus on within the justice department and the rest of the federal law enforcement community has to do with sharing information better, faster, according to the ftc has done very successfully over a number of years, but recognizing that fraud has become globalized and when you're talking about the targeting of seniors with so many different kinds of scams whether its lottery scams, a grandparent scams, ultimately we have to move faster, share information faster and collaborate faster. i mentioned one example of what we can do but it takes that active cooperation between the law enforcement here and in other countries. >> that's coordination among law enforcement. there's also the international component of these that will affect the messages we will send the consumers and that's something that david would like to talk about about how the ftc is recognizing the opponent of the work and how it affects the messages they get to the consumers. >> let me put this in context. there has been a terrific summary of the kind of scams that are plaguing older people in the united states. but they pose a real problem or challenge with for the law enforcement and for consumer education. so let me just sort of run through some of the reasons why that is. these are retail rather than wholesale. one of the keys to the scam untypically is getting someone on the phone and having a conversation with them. it may be initiated through the internet and it may be initiated through the receipt of a check. but generally there is one on one interaction between this gemmer and the victim. second come as jonathan pointed out, a lot of these boiler rooms are not in the united states. they are in canada, jamaica, donna, we get these complaints now even through a and spain show up in our list in terms of where these kind of calls originate from cities are not the baliles earlham in tampa that we can shut down easily. third, for the multiplicity of scams if you want to just educate people about grandparent scams that's one thing that these scams take multiple forms. grandparent scams, lottery, sweepstakes, fake checks come a mystery shopper scams. as you multiply the forms they take you geometrically increase the difficulty of doing the consumer had. so, we have a three-pronged approach to going after the scams that the fdic. first and foremost of course we want to stop them and called on the boiler rooms. we work very closely with the canadian authorities, the jamaican authorities and others to try to find these guys and stop them. we also are trying to go after what we think is the pivotal point. at some point the elderly person needs to send money to the scam artist, and that is the point we can go after them wholesale, not retail, as we have money gramm which is the second largest money transfer company underwater. we have western union agreeing to abide by essentially the terms we have in our money gramm order. one of the things we have done and is starting to yield results is we've insisted on relieve clear consumer ads. so if you walk into many wal-mart today hopefully within a year if you walk into any wal-mart, the money gramm principal outlet on the stores are under our order. you will see facing you as a consumer a miranda warning. if you think that you have won the lottery, guess again. if you are sending money to a relative, call them and make sure. if you think that the check that you just cashed is a real check, wait a month because it probably isn't treated you have been hired as a mystery shopper, again, sorry, your elflock. and again they are training the personnel who actually man and the desks to talk to an elderly person who is about to wire money to jamaica or montreal or dmca ghana. why are you sending this money? one of the sad parts, and this gets to naomi and boca raton king about before, sometimes they have to fight with the person. you didn't win. >> but it says right here i $1 million there are tragic stories in which ultimately they leave the money of let which won't let them lie near the money and go somewhere else and send. which sort of underscores the difficulty of succeeding on the consumer front. just to echo what david was saying, commonly in these types of scams, and i believe david will notice, in order to ensure the victim that they have won and they may very well received documents on ftc letterhead, doj and letterhead, irs letterhead, federal reserve letterhead saying that they one the lottery or saying that this amount, and one of the tactics to the government can use is there are laws against impersonating a federal employee or using this type of stuff. >> let me just finish. one of the things we're doing is not only going after the wire transfer companies, but for example, greenbaum has agreed not to allow basically a refund is getting money in jamaica. we are working now with a store value car companies in order to try to combat this fraud because as important as going after the skimmers and as important as the consumers are the way i think we will get more traction is by giving after the money and stopping the interdicting flow of the money. >> that's an important conceptual law enforcement tactics a lot of us are using which is what we go on but choke point is where can we attacked a legitimate business to stop the flow of money. we've been talking a little bit about some what seems to be sophisticated fraud overseas using phones and wires, but to the tried and true to door to door for august .... ken men are still around and it's something that abby has been doing and if you talk up the door to door fraud that's still happening. >> unfortunately it is still very common. at the indiana attorney general's office we have seen all of these scams among the consumers that we are representing. one of the scams that is very common in our area partly because every year we face a lot of storms which you all been reading about in southern indiana and tennessee and illinois. we always get tornadoes and very severe storms with hail, etc.. there are a group of scanners that will go from door to door and from state to state following the storms. we typically call them storm chasers. sometimes we have a different group of scanners recall travelers that just come seasonally depending upon the issues are. but in the case of the storm chasers, what will happen is they will follow a disaster and go door to door and say things like i just repaired your neighbor's roof and i have some materials left over. i'd be happy to give you a discount on your repair for your house because i've got one more day that i'm going to be here if you can decide right now so there's always this high-pressure sales, the concern for you're going to make a deal only right now. we did it for your neighbor, so they are trying to get a number of areas of comfort with respect to i already been in your neighborhood etc., and scores we've even seen people get up on the roof and make damage so they can ostensibly repair it. a lot of times the insurance company gets involved where they talk the person into signing over their ability to take the money etc pure yes, it's a very pervasive thing. we see it every single year and seasonally as well, and it's a really big problem. we also see it in many of the things you all have been talking about in terms of persons helpers coming into people's homes, and taking advantage of elderly persons. spec to could expand on that, we were talking a lot about strangers calling up and folks who know -- >> these are the opposite of strangers, it can be a family member as we've been discussing but it can also be someone who takes advantage of the situation of being in the whole of the individual. we've also seen persons who are committing identity theft, and this is something we warn people about all the time, where you've got a free pair individual who's come into the home to fix the toilet or fix something in the home, and especially older people that really any of us don't think about what kinds of personal information might be lying around in the house why all that individual was wandering around affecting the repair. so it's very important. one of the things we educate people is before you have a stranger in your home, you know, be sure to walk around your home especially where they might be and covering everything, make sure that anything that is -- that has your personal identity information is taken away and put someplace safe. we find that -- and i really appreciate all the research that aarp has done because we find education one-on-one to be much more effective with the elderly than anything else, so what we do is go all around the state, and i would encourage the ftc and of the federal partners to use the office is to read a lot of us to have very extensive outreach departments four we go around the state and educate groups of elderly and other populations. they listen to us because they think of as being a certain amount of authority because they see us as good guys so we have a bit of trust and frankly it's just harder to reach people with people and this is a population of of some material on the internet and they don't look on the internet for information. they don't even know the need the information until you tell them this is what's going on. and we do it annually if not more often. >> in the interest times -- >> sorry. >> we can wrap up which leaves me with one question of and how to perfect your singing and i will direct that david which is some folks don't know what to ask or what's out there and one of the things you can comment on very briefly is how do wall enforcement word about fraud, how can the folks be more willing to report them and how can we turn around and tell people about things happening? >> we depend like every other law enforcement agency and the courage of people to step forward. one of the things we've been doing is common ground conference is and meeting with consumer groups, the services, local law enforcement to try to encourage people to reach out, and that effort has yielded difference because we are getting people who are in the nursing homes or to reach of and provide services to the elderly. >> we will stop there because that is a fascinating point as opposed to waiting for people to come to us and people in the room can take that as a last message. you can reject where folks are. >> thank you, folks. [applause] >> the panelists are from my immediate left alex cooper the director of operations for the internal revenue service, criminal investigation and to her left is thus of all criminal coordinator and the tax division of the department of justice. and they are going to talk about again, common tax scams consumers and individuals should watch out for as they are preparing to file their tax returns. so, sally, carol, thank you for a much. >> good afternoon and think you for having me on the panel this afternoon. as mike said, ibm sallie cooper, the acting director of operations policy and support for the irs criminal investigation, and one thing we were talking about as we were listening to all the panel is there is a per mediation of scams commonalities between the scams in every panel it seems to be presenting today as far as the criminal investigation division the cia is the investigative arm of the internal revenue service. christopher the mission of the irs would be read for the criminal statute relative to the tax administration and related financial crime in order to encourage and achieve voluntary compliance with the internal revenue code. once the investigation is complete, we have a recommendation for prosecution to our partners at the department of justice specifically we start with the tax division who refuse our work and hopefully authorizes for us to go forward with prosecution, and they then in turn referred it over to the respective u.s. attorney's office and carol was going to get a little bit about her mission. the tax division of the justice department does review all criminal referrals from the internal revenue investigative division. we've really rely on the reunited states attorney's to carry the bulk of that water. in the criminal prosecution we also have a civil are actually more civil attorneys because as you know, there is a lot of affirmative tax litigation which actually may be seen as kind and high consumer. i've been doing foreclosures for over 23 years so there are a number of people who probably don't like a big part of our mission. but also, on the civil side a lot of the kind of scams that we will be talking about today for example getting the injunctions against bad tax return preparers and abusive tax shelter promoter some things like that. we are working in accordance with the attorney general's recent memorandum really pushing parallel investigations and parallel proceedings where we possibly shut down a scam and collect as much delinquent tax penalties as possible but also investigative prosecution's so we are really pushing those parallel proceedings. >> each year the irs has been putting out what we call the dirty dozen, and with this is a list of 12, of the top 12 scams that are perpetrated against innocent taxpayers. i'm just going to cover a few of them today. but topping the list this year is identity theft, and again, you have heard that mentioned through several presentations, and it is becoming so critical to protect your personal information. as it was mentioned on the previous panel, even having someone in your home, you have to be careful of what you have laying around. the irs is taking a very productive to get identity theft. we're sending notices to taxpayers where the first notice is that their identity has been compromised when we see more than one return been filed, and/or we see that a w-2 has been filed in that person's name that it has an on known employer. in january the irs announced more we did a coordinated sweeps week trying to attack this identity theft issue. now, anyone that believes that their identity has been compromised, there is an irs identity protection specialized unit, and that information can be accessed on irs.gov and look for identity theft. the u.s. attorney's office in los angeles mentioned identity theft and he also mentioned phishing, and phishing is where someone uses an e-mail or some other electronic media to try to solicit someone to respond either getting personal identification, giving account information, and for the irs it can appear that it is coming from either a legitimate irs inquiry or some related entity. irs will generally not spend an initial solicitation or request for personal information to a taxpayer so that should be a warning sign right away. if you get an e-mail from someone that it appears it is irs or related to the irs, be concerned and don't respond. either call the irs or look for the steps to take, but that is one way that once they get your information again, they can use that for all kinds of scams to filed false tax returns, they can use it to pay mortgage loans, they can use it for all types of things, and it's very hard to correct once that happens. >> let me just add with the phishing, the attack to get personal information from the consumers, and then what happens is generally the scanners turnaround and file some sort of a false refund claim, and often as mentioned the first notification, a victim will have that somebody else has stolen their identity, has gotten their personal the information and file a bogus refund claim when they go to file their own tax return and it gets out because the irs has already received what appears to be a legitimate tax return under that individual social security number. these scanners file tax returns very, very early in the tax season. in fact most of them are on vacation by now. and if you are like me, you are just thinking about pretty soon i think i need to file my tax return. so, the legitimate folks get surprised by this. we prosecute the irs has been referring a lot of these refund crimes that are facilitated through the identity theft through the justice department, and we participated in the january push that sally mentioned, even since november when our deputy assistant general testified before the house committee since november we have had a time of very, very strong sentences that for a refund crimes include aggravated identity theft counts, and a lot of these were able to get a part of sentencing restitution component so what's restitution hopefully victims and sometimes they are not everybody that is involved in a refund crime is necessarily a victim but there's restitution for innocent victims as well as to the u.s. treasury. collecting that is another story, but the court has been pretty receptive to give in restitution to both categories of victims of the individuals in the united states. >> thanks, carol. you made a good point that all taxpayers who are subject to a scant may or may not be victims and fun phishing and the ied theft probably are more victims than part of the schemes but when you're talking about the questionable return preparers and you go to the return prepare and give them your information coming your ultimately still responsible for what is on a return. so in 2012, every paid return preparer needs to have a prepared tax identification number and when they sign the return they need to enter that return or that number on the return. let me just say we are focused today on consumer fraud, but most of the return preparers out there are honest and decent. we are focusing go on those ones that are taking advantage of individuals. some of the things you need to watch out for or the consumers need to watch out for when they are choosing the return prepare is pos the prepare and her into their tax and an occasional burst to the give you a copy of the return because you should always see what has been filed from the irs before it is filed, and you should get a copy to sign. are they promising you a larger refund the and you thought you would get, and it goes back to the old adage somebody mentioned it earlier if it sounds too good to be true it probably is. do they base your refund on a percentage of your refund? it is also a clue because that probably means they are in fleeting your refund in order to increase the fee. do they require you to split their refund with them? and do not ever sign a blank return and then let them fill it in and then mail it in because again, remember, if you are going to have your return prepared, you are ultimately responsible for what is on a return. and this comes in to as carroll mentioned, some injunction earlier and that is one of the mechanisms that is used against fraudulent return preparers. >> one of the things we have to keep in mind is something like 60% of u.s. taxpayers use a page return prepare and as sally mentioned most of the market and have gone through the continued education programs, they have they're prepared tax id number come and they do a decent job, but it is the one that are perpetuating fraud and taking advantage of consumers that are the real problem, and we can deal with that in the federal government in two ways. number one is prosecuting them because it is a crime to file a false return. it's a crime to assist people in filing a false statement with the united states, but the other thing we do and can often do much more quickly is that a civil injunction against a bad return preparer to stop them from preparing that returns. that can frequently be done much more quickly than a criminal prosecution. typically what we will do is get a referral from the internal revenue service on a better return prepared and talked to several clients many that have worked with the return prepare loroupe. the other preliminary injunction issued a press release right away and then the community knows we have a bad return preparer or at least potentially babich return prepare as a community, and then a permanent injunction. a number of these bad return preparers very quickly say, you know, we give up, we will stop preparing returns, and we get a lot of these injunctions by consent. in fact, the u.s. attorney's office in los angeles is doing a fabulous job getting consent injunction from that tax return preparers often as part of a plea agreement in a criminal prosecution, so they are sort of killing two with one stone. so you have an incredible deutsch affect. .. the internal revenue service would then go on and the client and try to make up the tax loss from the individual clients. a lot of them are. set by that. but remember, the goal is to collect the right amount of tax from everyone and a lot of these people are either victims of a bad return preparer or as i mentioned, a lot of them actually participate in the filing of a bogus return through bad return preparer. so it is a delicate balance they are. we do try to collect the right amount of tax to the civil and criminal proceedings. >> the last one i'll touch on today as what we term free money, work people put up flyers and advertise they come many get free money for my arrest and is typically target some of the lower income individuals and the elderly as we just heard about. they charge people for filing returns and sometimes the returns don't go through a dirty hat their fees and they're gone with that money. and we have a number of tools and criminal investigations that we used to identify taxpayers come it be to do investigations and the article is to enforce laws and ultimately put people in jail that are committing this front against the taxpayers from the future. but just like we meet here today and people have been working all day, one of the best measurements is awareness so we do outreach and we talked to people is that they are aware that these scams are going on when someone approaches is something that does appear too good to be true, do you think twice about it before they commit or turn over money or turnover their identifying information, even when you are going out to do your own personal health care or other items. a lot of times before and i for your social security number and other identifying things. am i found that because generally my husband is the primary and i never have it. the never come back and ask me. there is able to process about the information so as much as take it out as little information you put out in a public venue, the better because any personal information that gets out is vulnerable for someone other that purpose to get it and use it for misdeeds, whether it is filing a tax return are some of the other schemes you've heard about. ultimately they all make money for somebody who is getting it that it doesn't belong to. as far as that you have any questions or doubts of any information that you received, especially unsolicited, please go to www.irs.gov website and they have all the official information that has been put out and that would be used by irs for official business. >> and also just a little reminder on the table outside, we've put down the press release at this year's dirty dozen. so if you want a little right reading, you can read about the other scans we do with if you can't get access to the internet this afternoon. >> thank you very much. [applause] >> our next panel is on business opportunity fraud schemes. moderator is charles harwood and bureau of consumer direction but the federal trade commission. the panelists are lois lois greisman at ftc, lois greisman here for further earlier, united states attorney for mr. to california, richard goldberg assistant director of consumer branch and civil division of department of justice, at mierzwinski director with united states public interest research group, also known as pirg and peggy shenk, senior examiner at the office of maryland attorney general. so with that i turn it over. >> thanks, mike. [applause] >> by my panelists take your seats here and i'll just begin with an observation. who among us has a one time or another type g, wouldn't it be great if i could go start my own job. maybe he was only a fleeting thought, but i suspect if we took a poll we would find many things they have within them someplace the ability to make it on their own to start their own business. she may be at the very least go out and do something that will make them a little extra money. in many instances the substrate they appear consumers think it would be nice if i had mail business, but they pretty much stop at that point. in times of financial escaping when people are anxious to run certain i suspect when people are thinking that their job is at stake in a neat little extra income because they were getting our seas to be the campaign and make inc. they're facing extra education class and they are worried about medical bills they may be facing or they realize, for example, the retirement doesn't go quite as far as they thought it would. for whatever reason they feel financial anxiety and panic situation many feel themselves in. when they find themselves in a situation that makes them more likely to decide to take that next step and go and try to make money on their own to sign up for a business opportunity or try and find work at home schemes. when they begin to look around, they find many, many companies and individuals who are happy to help them start this opportunity program or start the business opportunity or work-at-home program. that's exactly what we talk about. and the pride and sbc in a minute while there are many legitimate opportunities out there come there's also many command in the instant it is for consumers become scanned a more soft than they were before. we're panelists will talk about this and i will start with lois greisman with the federal trade commission. let's talk with the about what we see with the business opportunity fraud schemes. >> sure. it's a real problem that's not going away as chuck highlighted with the economic downturns and underemployed. for various reasons need to supplement income. i want to take a moment say, what is the business opportunity is just a commercial arrangement. i will help you -- i will help set you up in business. and i will provide she's something that may or may not be real. perhaps its assist in securing an outlet at a place, location assistance or maybe you'll be willing to buy back your merchandise, which often is the touchstone of the work-at-home scheme where you sit at home, stuffing envelopes or building various pieces of crass and i'll buy them back and find the market for you. consistently a top complaint getter and the ftc receives over the course of the year last year ftc received 1.8 million complaints. business opportunities for the top 20. >> nx is rich goldberg. he did a lot of work in this area involved in conserving prosecution. but let you talk about one of the schemes he worked on and how you did investigation what you found. >> typically the business opportunity firms to investigate about the sale vending machines, coffee machines, internet kiosks, dvd kiosk of any kind of self-contained unit that can be placed in a retail outlet in the locations are promised by business opportunity for them as well. these are high-traffic, high profit locations where the buyer at the machine is going to earn a large profit. so frequently these salespeople use earnings claims. they tell prospective buyers that they will make their money back within a year or so and from then to references to claim falsely that they own it has full opportunity with these vending machines. truth laid bear the cousins are brothers rather salespeople who are posing as real customers, but in reality are getting paid to prospective buyers. the customers will also be referred to locators who will promise these high-traffic high profit locations when in fact they are just part of the conspirators. one of the scams that attorneys in the office is in the various kind of this scam. they did in conjunction and this is a scam that appeared to be out of the u.s. various different cities where these scam artists reported to be in the u.s. do sold greeting card display racks. from the u.s. but in reality they were in costa rica. all signs from the prospective buyers indicated that they were in fact in many cities in the u.s. to use voice over ip to make it seem like they were using real phone numbers in the u.s. they were using drop boxes in the u.s. and other mechanisms to disguise the fact that data salespeople, the locators and references were actually all sitting in a boiler room in san jose, costa rica. in that they had various phones in the boiler room has indicated the phone numbers reportedly from. working closely with the poster region recent government were able to were able to execute search warrants on the opportunity brewing in san jose. there is able to do a number of arrests and expedite these folks back to the united states for the prosecution and a receipt you have send says of the prosecution. the scams that we have been ones where it's not true that these consumers should have been aware this isn't the circumstance if it looks too good to be true probably has because these consumers are doing their due diligence. calling reference is, colin locators. looking at the better business bureau and i would say d.c. are these businesses have evaded here the problem is the scams will open up under one name and run for nine or 10 months and close down and resurface under completely different name and location. so there's no way consumers could know. there's that with the better business would no that is a fraud going on for years. so while in some context that advice is good for tumors, for claiming service in the business opportunity industry, they will not know. they need to be very where they need to look at the advice of the federal trade commission's because of the race for fall for this scam. sitting next is peggy shanks with the attorney general's office. you want to talk about >> yes, sir, thank you. anything i say and in based mail knowledge information. many skimmers who live use the internet and telemarketing call cars alive and well. recently we got for such cases one involves an elderly woman but it's pretty much atypical. as a great investment or she would purchase an internet website for an online mall or she's tall travel packages and is going to earn some commission and piqued your interest. a little while later says she's going to be account manager and will and will set it up if she pasted up as a packages kicker and $9600 with one sale. so we also told her she's going to get these travel binders and i've discount coupon vouchers and things to help for business. you might need action advertising because of how they need to go. you get it credit card number to pay another $1500. a day later come he calls it back it back in thursday night could've earned a thousand dollars to the sale of the level one director cut. she pays an additional $2000. two weeks later he calls her to upgrade to level two director packets read this time she gets out of class she was concerned because the credit card was a high interest rate, but she put forth for a thousand dollars on a credit card. two weeks later they calling visiting should upgrade to a level three packets. now the elderly said i'm sorry, i'll laugh us to savings bond for my daughter's college education. they said you're going to make some initial pay for your daughters college education with the money are going to learn. she writes a check for another $7900. two months later to recall certain what they are set for an additional $600 she could get a responder that would help promote the website. months passed in cg, trying to get these voucher binders should never receives any and ambassador team does in $300 in make zero money. and our state's commissioner does not have the authority to turn money paid back. but even if said there was no money. this arizona company after that failed encrypt c. now as a creditor or she's going to get her money back. we all know that's not true. anyway, maryland has issued a show cause order. i can't tell you the outcome of the case, but in the order the violation of the asked for fraud and misrepresentation beacon for a permanent bar against the company and the president from offering business opportunities in maryland. the problem with all of that is just as rich said, many of these companies -- it's not a sinking ship. they resurface as a new entity and new comp be made for spouses or sales routes and they are at the home the new comp me. >> thank you, peggy. to my last is andre birotte, attorney in los angeles. we just heard from the rich and picky about business opportunity schemes they are wary of. they talked about consumer last $18,000. i'm wondering if you could talk about the business fraud case your office has prosecuted, how serious lessons have been and what kind of relief for conviction you're able to contain. >> i mention some of them earlier in my early remarks. one of the advantages as we try to devote resources where we can get the biggest impact. and i'm talking really about the fact that he will typically take cases that have a high dollar amount. i hate to say given our dwindling resources, the loosely talking a fraud schemes anywhere from 2 million to 5 million mark in a minimum and there's a number of reasons for it. we've only got about 200 federal criminal prosecutors in district to represent 18 million people place you can imagine we have deserted pick and choose as it relates to the cases, but also because we do the cases we ascended the guidelines that dictate or at least her guideline to the court. and often times these fraud teams are tied to blossom out. so what you try to proceed forward and make sure we get a sentence that we can let the public know if you commit these kinds of crimes, you will go to prison for a significant amount of time. as i mentioned earlier, you have an individual that has divided 87,000 victims and he went to prison for six years in federal prison and within individuals for 12 years involving schemes that were the $39 million. $6.9 million in other instances. so we will talk about high-volume mounts with high sentences. again, the purposes because they want to have deprived and the public know if you try to commit schemes the federal government will be watching and we will try to impose -- hold you accountable to the hersh is the fact we >> thank you, andre. when the next turn to low lists. i will just talk about some of the prosecution efforts that they've made, but what other activities are beginning to take and protect consumers from the stands. are there regulatory activities are rules that help protect them? after loiselle come back to peggy and ask her about abuse at the state level. >> the ftc is a wonderful new tool at its disposal. it's a regulatory requirement that requires the seller the business opportunity to provide a one-page disclosure. streamlined short and tidy as it can be. a series of disclosure about who is the seller, what is the nature of the business opportunity, private vacation the sellers involved in and perhaps most critically any earnings claims made, you don't recoup your investment in six months. you start learning $10,000 a month. anything like that they've got to provide written substantiation for this claims. and disclosure document also requires a list of documents say the they had that good is sold the ability to find out who purchases most recently than what was their experience. the disclosure requirement took effect march 1 and i can assure you the ftc along with our partners at the state and federal level will be vigorously enforcing it. >> thank you, lois. peggy, how about the state level? what sort of resources are available for those who want to learn about the state level and what can they sure to click >> well, with the business opportunity sales that, where it cutters -- i like the new business opportunity expanded in scope that now covers first of all they only have to make a payment peer before the threshold was a payment over $500,000. under our lot is 300 in the first six months. under the new federal law in now covers the work at home schemes. so i think that is really a good thing. our lot does not cover that, but the business opportunities traditionally are stickley covered will still continue to register and will still be required to file a more in-depth disclosure document required under our act because it would give greater protection and more disclosures relating to business opportunities. for example, the very first thing we do would be described with the seller promises to do. it is going to talk about the agreements throughout rich is talking about in the location assistance in the name of locators and those types of things. one of the most important disclosures is whether or not they look at the territory. everyone knows competition is really important. they will disclose financing arrangement, but they are going to include a copy of their audited financial statement not alderton 13 months. they'll include risk that there's a bit of a high risk respective nature. the most important thing is they are going to get this disclosure and that the federal rule or stapled and they are going to get what they sign or money. the federal rule is seven calendar days before they do that. it's 10 full business days. and this is going to allow time to review the disclosure and to check, check, check it out before they invest. >> thank you, peggy. i want to get to add, but it looks like we have time to ask a question that occurred as we were talking and lois, maybe this will go to you. there's a lot of tools here for dealing with this opportunity problem. what is your experience to try to pull this together and sort is undertake the effort to try to stop this click >> we've got an impressive track record here and it is federal state -- federal and state, civil and criminal and each of the last several years backcourt mate with the their law-enforcement partners recall them seats, front initiatives to pull together the resources to tackle business opportunity fraud on a whole slew of bottom dollar fraud. the most recent was in the last 12 months. we always need them. it's called empty promises. no less than 90 actions were filed by the ftc must law-enforcement partners we think this gives us the ability to have the maximum impact of visual impact which gets a lot of press coverage and we always couple of law-enforcement activities with the whole consumer education peace. >> i know you've worked on some of these joint efforts as well. >> at the state level with limited resources for prosecution with many resources were at the ftc, u.s. attorney, and the fbi and the case comes to my mind for there is such a joint enforcement action. ireland had initiated an investigation, but we needed some additional assistance so that to the u.s. attorney's office. very quickly the fbi joined in and executed the search and seizure warrant. it results in a federal prosecution and criminal conviction of a 32 euros more in sentenced to 30 months in the federal penitentiary. >> thank you. i wonder what about from a criminal -- thank you. i wonder about the federal level. are we successful in working together? had been working with the states and ftc, rich click >> we have. it has participated in all of this leads to the federal trade commission and the state counterparts in fact over the last several sweeps, we've added our criminal prosecutions up to over 140 criminal prosecutions of business opportunity fraudsters over the last several years. those have included defendants who have been sentenced to prison terms of a few years. the ringleaders have gotten fed visit 10 years, 15 years and over 20 years in jail for this sort of fraud. we have some defendants who are fearful of criminal prosecution and a flight to other countries and we've been successful at arresting these folks who have fled in countries like costa rica and the philippines and foreign governments have been very cooperative that extraditing individuals back to the united states for prosecutions. it serves a terrific deterrent effect, the civil and criminal. >> in our district this is nationwide. and a world of dwindling resources, the task horse model seem to work well wherever you are. quite frankly, most of our big cases we get from our partners for a regulatory agency because in some instances like a case you describe could be the tip of the iceberg that we get information about a ring that going on and start to build upon again into bigger and grander losses delegate to archive my muffled and bring a big impact on the community. >> thank you. we will turn to add. we have heard about the scams, the injury, but who are the big guns? at these people who think they can make money overnight? what do you know about them? >> i think you should turn to the left and right and look at the people sitting here. it is not the other guy. look in the mirror. it's people like you and me. educated people who have done their due diligence. as david said earlier in the bad economy were facing with last dollar scams that target individual can dimmers for mortgage relief for debt relief and we also have scams that target people whose jobs have been downsized, people whose spouses have been laid off, retirees whose 401(k)s read like stephen king novels because of the crisis wall street dumped on us. so it's really everybody and even people who have done the due diligence as rick said. >> are you seeing the same thing with your victims click >> absolutely. that's one of the challenges we have been trying to get victims to come forward. we breezily have a press conference not so much as a business opportunity realm, but the relative distress teams mentioned earlier. we were able to get seven folks to come forward. when you looked at them, one of the persons i worked with in the city of los angeles and my prior job, college-educated fell for it and so the challenge is getting people to come forward to feel that book you can happen to anyone and that is so we try to do is let people know that. >> so i am assuming in addition to law-enforcement, there's educational component to all of this. to want to talk about what kind of educational efforts he know or be made to teach consumers click >> briefly until you first about the federal trade commission's website is the place i would recommend consumers start. just look at on the website come ftc.gov the business opportunity fraud. obviously you should check with your state attorney general office here. all your attorneys general are at an aa g.org. find their addresses they are her in your state websites. the national consumers league is here and they have the site fraud.org which is helpful to consumers. i would really advise people to not pay attention to the information from the people working possibly on fraud with the fraudster, but to consider talking to their friends, talking to local consumer groups and saying i am thinking of getting somebody that i don't know 10,000 or $20,000 to make a lot of money. what do you think? to consider hiring an attorney for one hour of consultation. but they're a lot of places i would start. as gophers to the ftc. >> lois, i have seen you take a look at that disclosure document. >> absolutely. we've streamlined it to one page to make it as readable and accessible as possible. and also to serve as a warning. if you don't get the one-page document password. to get to run around, leave. i want to echo some pain at the others have said. oftentimes the victims are sophisticated people and there just is no quick fix here, which is one of the reasons of that tremendous vigilant as the then and enforcement in this area. >> at the worst happens and people find they been victimized, what should they do? that they've discovered they're not going to get their money back. what are your thoughts click >> there is a reason we have tens of thousands of complaints and we use them. our law enforcement partners sitting here use them and they'll go into centralized database. last year 1.000000 went into that database. they are absolute treasure trove. it is a resource that we can use either to develop a case in the first instance or when they know there's a curt operated out there to find it tends to help us build a the evidence we need to shut them down. i would also urge people obviously to file complaints with the better busssi andlso t. >> i would echo that. plus your federal state regulators come attorney general's office also has a website or you can call us. it might be the right church, wrong pew. it will forward the call to consumer or security sentelle state agencies. we network with other state agencies across the country. we constantly sent e-mails. a lot of the fraud was the consent of arizona and nevada and utah and sometimes it's necessary to contact agencies out there. the name to report it, to come forward. the first question everybody has is how did i get myself in this? it's no big deal. there's a lot of people that follow the 10 to business opportunity fraud. nothing to be ashamed of. the real question is what can i do about it? there is a private right of action to sue, not just for not recognizing certain violations. it still doesn't mean they're going to get their money back. it is important to report if you know someone that's been a victim because it may prevent margaret adams. on a final note, i like to say there's a new kid on the block. we've seen a new company that now contacts the systems and says they can help them get their money back. of course we will see. it's another become the master second time. >> when they see it, andre, g1 anything else before we close? >> the key minister reported maddest and quite the challenge. many folks say how can i let myself do that? are too scared to tell their friends and that is what allows the cycle to go on. the other thing is the whole purpose of this roundtable, town hall if he will it be develop those relationships and partnerships. and coming out here from los angeles and i'm going to take this on the road if you will then convene a meeting like this because quite frankly you are the vehicle by which we can get the word out to the streets, to the churches, different community groups, et cetera to let them know. these are great websites and tools, but is no one knows to go come and they won't know where to file complaint. if you take the message to your community group and say look, here's the things going on and ask us to come to you and give a presentation. we have a community relations specialist in our office. that is her purpose, the team's purpose to get out and spread the message of other agencies do to provide that service. at the end of the day we are about protecting communities. room as good as the information we get. it's a two-way streets were strongly encouraging to take up on that offer. the attorney general and tony are serious about engaging this is not a one-time meeting. >> rate. i think on that note, that forceful and powerful that i should say i think we will stop here and turn it back over. thank you. [applause] >> ladies and gentlemen, thank you very much. that answer panel session. i think what you saw here today with this summit, the three panelists and the remarks by the attorney general and the other coaches are consumer protection working group it is an anachronism to allow federal state and local law enforcement officers and the spectral state attorneys general and that there's involved in this area to get together and share information and how we can do better and help prevent fraud from occurring in the first place and when it does, how we can increase our enforcement efforts. i think what you saw today is a good example of that in action. as many people as that, this is not meant, but a beginning and we will continue to work together. the attorney general has said that on a few occasions in the past. the scans of consumer fraud and other financial fraud scheme are as diverse as the imaginations of those who perpetrate them and us modern technology will allow. we are onto those schemes that were going to continue to pursue them and protect the american consumers and others have been victims of financial fraud and we thank you all for your tension here today. thank you. [applause] [inaudible conversations] .. >> good morning. before we start to mention for security reasons the doors of the room will be closed for the duration of the evened. i hope you will understand. good morning ladies and gentlemen. i am vice president from the endowment and i would like to thank you for joining us what will be a very fascinating discussion it should be apparent to all that we don't measure in months or years but decades are generations in the last 14 months long time autocrats have fallen and in syria also appearing to be number they have important developments. people of tremendous courage but only the beginning of the story. now begins the painstaking work of governing and rebuilding. why dictators decisions made today from those elsewhere will help to shape the future in libyas case the fault, of gaddafi raises a host of challenging questions. hard to rebuild? after 42 years of misrule? what can be done to ensure government is transparent and responsive to the will of the people? half due disarm and reintegrate the country militia or breathe life into the economy? our guest is sentiment the film it -- "wall-e" with all these challenges. abdel-rahim el keib was of a dissident under the gaddafi's regime. he was educated in the united states of problem solver from the university of alabama for several decades. he dropped everything to join the uprising against gaddafi helping to finance and lead the revolution. last october elected prime minister of libya by the national transitional council now responsible for overseeing the country's rebuilding efforts to shepherd libya at two elections this summer. our great pleasure to have him here at carnegie today. please join me in welcoming his excellency -- excellent say, prime minister abdel-rahim el keib. [applause] >> thank you. distinguished ladies and gentlemen,, good morning. i am honored and very pleased to be here with you today and think for the petition in their outstanding program which supports him promotes the rights of people. the freedom and dignity. very pleased to be here. for many libyans, myself included, freedom and dignity in our country not possible only eight months ago. could data used those in his arsenal. -- he would use those in his arsenal. fear, oppression and violence. said the humanization of our people. his political theory was self-serving. to his ego and his interest and his alone. after 40 years of silence, libyans could be silent no more driven by a desperate desire of dignity and a resolve for freedom. on the 17th of february, a little over one year ago today, are young libyan women and men took to the streets to protest peacefully the unjust imprisonment of noboby and actors. few-- later. this was echoed in tripoli when they took to the streets chanting we sacrifice our lives and blood for you. they follow suit and the first revolution in the history of libya o was begun. however, '02 dignity equality, freedom was rough. the brutal regime could not to adhere to the will of the libyan people without a vicious fight. promise "rivers of blood." and hundreds of thousands of deaths" . and determined to deliver on that unwavering promise, the most violent attacks were launched against our people, supposedly his people. fire was on an unarmed people and heavy weapons used to crush them forever. that was the moment and the tenacity were history would turn. our brave men and women armed with courage and resolve faced the well-equipped gadaffi army. the determined men for freedom picked up weapons to fight for the first time. been pushed their sons, brothers, husbands, and fathers to join the quest for dignity and freedom. others, some of them are here. worked the phones and internet to plead for help to the international community. it was difficult to say the least. the cut off the killing machine would not slowed down. bodyguards of thousands of our young men were lost. literally thousands. i am not sure if i should say this, but if you need to know, many of our young men and women and productive organs cutoff. things were looking grim. and we all held our breath.ns c. things were looking grim. and we all held our breath. resolved, a decisive point* of no return was reached. turning it around they chose not to sit quiet and watch as we were being massacred. to our gratitude, the international community decided to pass the u.s. resolution to protect civilians. the international community was united under the u.n. resolution under which was to protect innocent civilians. these enormous efforts were initiated by our arab brothers and sisters and later with our friends and partners and i take the opportunity to tell them think you. such efforts day was the motivation we needed to continue our fight to push forward our citizen army of teachers, mechanics, lawyers , students, engineers, docto rs, professors, and businessmen suffered great to why losses along with the rest of the civilian population. strong in their pursuit of democracy shared governance and rule of law. with great courage and sadly also with great loss, we manage to push back the forces to the east of libya. we endured to maintain the unity of our country. we took control of the western mountains and then we liberated tripoli. after a few months and thousands of deaths, the wounded and men and women we fried our country from the grip of tyranny on october 23, 2011. and the hunger for equality and democracy within the libyan people which has focalized freedom to give us back our dignity. the libyan revolution is the proof of the incredible resilience and tenacity of the libyan people where to even extinguished the libyan dreams of freedom before he was proven but comprehensively and graciously wrong. the now infamous question we are libyans and we will be free. yes. we are all free. today, one year after the outbreak of our revolution. our spirits is exciting on the streets of our country. it is liberating. it is humbling to those of us who are interested with political responsibility during this period. perhaps to speak of guardianship, that would be too presumptuous. i see as interim government to be the facilitator to focus tremendous energy on the libyan people to ensure it is used in such a way to keep it alive. we know it will be challenging. 42 years of dictatorial rule have taken their toll on our country and people. we cannot build the new country overnight. rican not build a new institutions overnight. we cannot build awareness and understanding and mistakes will be made. however libyans prove their perseverance those things may appear to be outside the people bring them back. libyans are learning for the first time in four decades to trust their government. much libyans have never known of government and did not care to know that government. quite the opposite. for the members of my government that we understand the principles that we are acting in the interest of all libyans. of principles of the revolution need to be promoted if they are to be upheld. would be and falls for democracy and it is our job as the interim government to pave the way for democracy. we are working hard to build it. realizing democracy is not just a concept. have their for the national transitional council then with the election commission to carry on for the election. soon we will be electing a national assembly. my government will do its part to make sure these elections are a success. meanders stand there the first age of libya accelerated democracy. and is a pricing between the libyan and american experience fighting for democracy. take the formation of the transition in the united states. it led the state's on the path toward the elected government to convention that drafted the constitution with the libyan movement during and after the uprising to guide the coming election in june. to oversee the constitution and as a bedrock for the democracy and insured the transition with the elected government towards washington one said "the constitution is said guide that we will never abandon." and the bn also embrace this idea has been a move forward with our democratic tradition. the bf offer human-rights we must pay a the way as expected and guaranteed. as i explained in the 19th session of human-rights council in geneva, less than one week ago, several countries insuring the human-rights of all the bands have already been taken. violations of these rates will be investigated. in this committee by the minister of justice with civil society. mccain for justice to lay their foundation our differences are rooted in the past, and not the future. we believe in equal opportunity for all. and then have no place. the libya in which all of ethnicity have freedom comment equal rights to avoid the civic affairs. we believe in a country in which women and youth have a strong presence we're also committed to national -- because we are well aware that no country can move forward. we have been actively involved in this trying to form an association to streamline the process of reconciliation of these issues i should also add we're working to build a strong civil society for more transparency and accountability. over four decades the coffee regime has appropriated resources which should have been used to the benefits of the libyan people. libyans finally deserve to live up to their great potential to see their quality of life. we are laying the foundation of the mediterranean provincial center which links europe and the west to africana and the middle east. . . and of the human spirit entity one. asad libyans we have much to discuss than to learn of our newly free country. to learn about rights which is also low responsibilities. to learn of the role of civil society and the free media were, and we have and i make no apology for repeating this again for the institutions of the state to rebuild from scratch. it is a huge challenge with a truly exciting one. like all countries, we have challenges, like all countries we of differences, and like all countries we make a mistake but the question for me is whether we have a plan to meet post-religious. whether we have a common vision must be bigger than our differences. and whether we can learn from our mistakes i would like to offer a resounding yield to each of those questions. there are far too many examples in the recent history of countries which have faith in their bid to accelerate the transition to the dictatorship to democracy. this has given plenty of encouragement to those who insist freedom and democracy take decades if not centuries to establish. libya would prove wrong how. we are blessed with many factors including our natural resources. but above all, we have tried and confidence in the knowledge and that we overcame. one of the most brutal and dangerous dictatorships of the modern h-1b and win over the past year what we did speak to what i know this coming year we will again do what everyone might think important. again, we are determined to turn the tide of history to win. we have freed ourselves of our recent debt, excited for our future, and grateful to our friends and partners who helped us come this far. we are now proud to call ourselves to nations which believe in the same fundamental freedom, equality, opportunity and success. thank you very much. [applause] and very encouraging words. we are going to open up the floor for about 30 minutes of questioning. before we do that if i can take the opportunity myself to ask the first one we have some very encouraging words about libya's defense commitment to democracy to a pluralistic society moving forward this is a concern of many in the region and your as a cause of terrorism in the arab world. will the world finally be able to put in place a system that would ensure the pluralistic society or would it simply create another set of crisis regimes by others? and will have assured many the commitment to do this but course the world is not easy in their region in the country that has been on democracy for a long time and one set of fought to the political diversity and cultural diversity. >> [inaudible] [laughter] >> welcome you know, when i first get to be directly exposed to the process of the men and women revolting against the wall ghadaffi regime it is something that gave me a feeling they never had before and many of us here in this room for in the opposition against ghadaffi and we've been through different experiences, fantastic experiences in fact. we tried different ways and means for this. it's not a group. it started as a small group, but it ended up bringing everybody together, started with young men and women and brought everybody together. when we were first in the western month looking through those young men and women who were really young and they just felt it deep inside the felt yet they could do it. first time i see the group of young men and women and lydia affecting the arab world, but this can-do attitude isn't there were this case i could see it and i could feel it and i asked them look, what do you need, what is missing here? still in the world weren't not liberated yet of course when they said look, we just need to get going home. we -- the simply could not wait so if that story i guarantee you they would not let go what they had. they wouldn't give it to the it wasn't simply a group of older men and women telling them what to do and this was the resources that would build libya and it can't be anything else, and to no one of the reasons why we have been having a little bit of difficulty trying to reintegrate these young men and women into the defense ministry and the interior ministry will is the fact that they want to make sure that democracy prevailed. what we don't need money, we don't need nothing. but what we do have these democracies so i don't know if this is the answer you were looking for but they get to see you and this is different. i've never seen anything like it [inaudible] i know a little bit about a few things. >> thank you. let's open it up, please. short-term question we have a lot of questions and sure. >> i am a capital intel group. looking at libya from the outside of the recently traveling quite often to tripoli and libya, and one of the things that strikes someone when you go to tripoli is the amazing intellectual capital come you have the budding entrepreneurs. this country is going to do miracles. we are going to do 5g in the year alone and there is incredible, people want to do things, they want to create jobs and i think maybe some of the things we should be talking about is let's go business to business. what we can do today can be done today on the private sector. everything else will take time. they have a billion dollars in the infrastructure finance and they are moving forward. and libya is the new market in that same nine months to a year. this is really going to be the game changer not only for the region but for the west also. thank you. >> okay. please. >> johns hopkins center. my question is do you believe that equality between men and women in libya is the transitional government as the first new wally of the reintroduction of polygamy in libya? >> let's take one more. >> i'm with the american british council, just briefly, sir. i was one of the victims of the regime. i live in libya and know exactly what happened. mauney question is regarding the infrastructure and rebuilding in libya. ask the prime minister recently that maybe to this gentleman's question are you ready for this project to start off and the security with something they can trust because that is probably the biggest question in the mind of everyone in putting the american business is. [inaudible] >> i have nothing else to add but to tell you that maybe my wife had more than i and that must play a role and is not an option, and we can see here some smart libyan leader -- ladies, fantastically, some more here. libyan ladies they would have a place and presents -- of presence. polygamy, i don't know what if this is the proper place to discuss this, but i'm fine with one, you know, so -- [laughter] i'm not going to add another one. but i tell you, yes if i forget my title as prime minister and i talk to you as a friend directly, hal many of us have a wife, and more than one many of us are unfortunately do that but in libya this is not going to be something of a problem i don't think this is something that people want to. i don't know how it came out, but don't worry about it, okay, it's not going to be a problem, i guarantee you this the project starting soon, yes. we want them to come back as soon as possible. security is at 100%, no, close to 100%, yes. can it be improved, can it be better? yes. but anywhere to go security is not 100%. this is entitled to be in libya on guarantee you this, and we are looking for long-term relationship partnerships i should say of a than somebody that is just coming here for a hit and run situation, so please do and if we can help you in any way to come back, by all means. >> let me read some questions from the other room so we have people sitting in the other room and they have to send their questions in fighting one has to do with militia groups in libya who are posing the question of resisting the demobilization and appears to be preparing action. what will the government do to prevent the group's from intimidating rule on election day? the second question has to do with the new constitution and whether it will take into account the designer of many in the east for the decentralization, and third, if you can discard the transition government engagement with libya in civil society and the private sector today what can each sector due to support the transition of the new government? >> thank you very much. concerning the do not agree with the world militia. we have young men who fought hard, and i feel uncomfortable calling them militia because it is a different concept i guess. what is happening is that these young men -- we want to take care of them. they did this for us. it's not like, you know, people forming the militia because they belong for is certain sector of the work somewhere if he [inaudible] you see people from everywhere in libya, and it is literally like that. people came from the eastern front, the south, west, everywhere and they came and fought together [inaudible] it was from everywhere and the same thing happened. in the mountains the same thing happened. so, it is not militia as we in the stand militia. what we did is we set look, we can't just tell them now you did your job give us back your arms and just get going, you know. that's not the way we want to do it and try to explain and work with them, so what we did is we said let's have a project, a big project that will try to integrate them or reintegrate them, and this project is now in place. it has three dimensions. one is the interior ministry, those that are interested in the security work and police work and they would give them training and hope that they could actually progress in the developed the come and another one is the defense ministry that can be part of the armed forces which would treat them with disrespect etc., and those that have 20,000 of them in this kind of growth even more we have budgeted for 50 of them, 25 each, and then we have formed an association we call it to take those who are not interested in the police force or the armed forces, and give them opportunity to train, scholarships to go into universities outside the country, may be inside, and do graduate studies to get a ph.d. and what have you and there are many of them there. if they are interested in fighting the feet of finding a small companies to give them small and medium-sized loans being successful we have about 130,000 of them who registered in this association, and we are going to deal with every stage to give them the best we can ought in terms of offering every bit. we are sick jury maseth and ascent a thousand of them outside of the country to short and somewhat ago to turkey and some of come here and the u.k. and may be france and automatically this is hypothetically happening, they would give back their arms and get on with their wives, so when the good side about how peaceful and successful it can be in libya is it took place during peacefully, three successful and another sign of how peaceful the country is in the coming together of the people and celebrating the evolution you can see it in the big cities with no problems whatsoever. it was spontaneous. people simply cannot and celebrated. before i came here i thought it's very important but it was not perfect to bring it to share with you, but to refine it and he -- we can get there. that's the militia group. in decentralizing the government had brought us we are all for it to be we strongly believe that in the regime it led to the center was operation for the wrong reasons and it is going to cause problems. it is unfair for someone to travel from one city of thousand kilometers or even 300 kilometers or 200 kilometers to just a flight for a visa or to try to get just an official document signed. this reminds me of the 18th and 19th century so we are doing in number of things. one thing is we are -- we have already prepared and we are just simply fighting the law in the district some so that is decentralized and the operation. the other thing for now, we will have representation of the government in them where people can actually communicate with the government through the offices directly and get quick responses. we are also asking governments to have confidence in the city's, and we are getting positive response. be a turkey for example, italy and, i think a few others, the british also do the same. they hope the u.s. would also do that. we are also -- we have started having some of the major operations for its simple for the local resource, but the department if it is a huge department is in charge of -- [inaudible] and the local resources and this would be located. this is a big corporation. and we do more. we are also working on this electronic government project. this would definitely be quite successful in decentralizing the operation, so we are going to do things in a way that would contact the plebeian individual and hopefully we take care of this but it will take a little bit of time. the private sector just before coming here i had a meeting with what may be for 30 to 40 libyans in the private sector and this is not the first time. a couple of my colleagues on the cabinet who rescued them and other places. we communicate, we feel strongly that in libya you have three pillars that should work together in supporting and creating and that is the government private sector and civil society doing a great job there we meet with them. we've time for one last question. spec my name is andrew. mr. prime minister, thank you for your remarks. my question for you is would you welcome the russian companies back to libya, and will your government honor the contracts and strike under the regime and what will be with their projects including those with the russian participation which has been suspended do you discuss these things with the russian government? thank you. >> yes. >> university of maryland and lydia scholar. i have a two-part question. secretary clinton yesterday praised the building of inclusive democracy under your leadership which you have eloquently emphasized this morning. i know of libya faces multiple challenges ahead but could you kindly tell us your government thinking about including the brokerage and the jewish community that once lived in libya for over 2,000 years and then forced to leave? in this regard and this is the second part of the question to the jewish community of libya held for a symbolic recognition and restoration of its important religious and cultural heritage and such as the synagogue houses of learning that were destroyed by the regime? i know that many today are not even aware of the existence of this committee on the libyan soil but they are curious to find out, and especially to find out from their parents and grandparents who tell them about the good relations with their jewish neighbors from many of centuries and hopefully in the future. >> one last question over here. >> line with freedom house and libya outreach but more importantly i'm a lesbian americans. first let me commend you and thank you and your team. we support you and we would like to see more of you. the first question with regards to transparency, but efforts are you taking or not even what efforts, is it possible for you to just, they on a more weekly or daily basis what is your doing at least for those of us here based in d.c. it seems as though we are getting more of the indication from the national transitional council versus t

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