Music, Song and Ponzi
The Wall Street Journal has reported on a new twist in Scams Use Leased Radio Time To Target Immigrant Listeners.
Jennifer Levitz reports that "Rick Santos, manager of WLQY-AM in Miami, says he thought the popular Creole program that aired six days a week on his radio station was a "musical variety show."
It was actually part of a fraud, according to the Securities and Exchange Commission. Scam artists used the radio for two years to promote an investment scheme that ensnared 631 Haitian immigrants and cost them nearly $6 million, a federal court ruled after an SEC complaint."
I have posted before about this advertisers being warned by the FTC, but what makes this interesting is that the criminals buy a block of time to broadcast in a language that the radio station operator does not understand. Recall that a recent Korean Ponzi scheme was enabled by a similar trick.
How can the radio operator claims do any due diligence on the content of these ads? In the US, this might not matter. But in Canada, the radio station operator would have to show that they acted in good faith in accepting the advertisement to avoid a civil action by the Competition Bureau for misleading advertising.
According to the WSJ, "Station executives who speak only English are often unaware of what is happening. At WLQY and elsewhere, managers often lease time to one entrepreneur who then subleases it to another, so there isn't even the minimal screening normally given to an advertiser or buyer of time." And the practice is on the rise, subleasing doubling over the last decade. So how could the radio operator who didn't understand the language act in good faith? I would like to see that legal argument.
When a radio station calls out your name, in your own language, it doesn't mean that you are special. It does mean that you should be doubly on guard and even more skeptical about the claims made because the regulator is literally not listening in.
Technorati Tags: ponzi scheme, haitian immigrants, target, radio station
