Competition Bureau investigation leads to jail time for phoney invoice scam

OTTAWA, October 1, 2004 – A Competition Bureau investigation has led to jail time and fines totalling $915,000 against four Toronto-area residents for their involvement in the Yellow Business Directory.com "phoney invoice" scam. All four were convicted in April 2004 following a five-week jury trial in the Ontario Superior Court in Toronto.

Alan and Elliot Benlolo were sentenced to three years in federal penitentiary and fined $400,000 each for violating the false or misleading representations provisions of the Competition Act. Also sentenced for their involvement in the scam were: Victor Serfaty received an 18-month conditional jail sentence (including six months house arrest), 100 hours of community service and a $15,000 fine; and Simon Benlolo received a nine-month conditional jail sentence (including three months house arrest) and a $100,000 fine.

The individuals sent out mail pieces that falsely appeared to be bills or invoices from Bell Canada or the Yellow Pages, when in fact they were solicitations to have the recipients' business details appear in Internet-based directories operating under the names Yellow Business Pages.com and Yellow Business Directory.com. Between May and December 2000, they sent mail to approximately 900,000 businesses and non-profit organizations in Canada and generated sales of over $1 million.

The Competition Bureau received more than 4,400 complaints about the phoney invoices which asked recipients to send either $25.52 or $37.40 to a postal box in Toronto.

"These sentences show the seriousness of Competition Act offences," stated Raymond Pierce, Deputy Commissioner of Competition. "The Bureau will continue to ask for more significant penalties in deceptive mail and telemarketing offences under the Act."

The Bureau acknowledges the assistance it received during its investigation from its law enforcement partners including the Toronto Police Service, Canada Post and the RCMP.

The Competition Bureau is an independent law enforcement agency. We contribute to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice.

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