Tales of betrayal

Four businesses that had been operating for years suddenly stand accused of scamming customers

Luis Perrone in front of the now-closed Payments Plus, which he says defrauded him of $900 that was supposed to go to pay his bills. (Pat Greenhouse/Globe Staff)

Zoraida Claudio is setting personal records at record-keeping.

Claudio is a reformed cash-only consumer, who now pays bills with money orders and keeps receipts for a year before tossing. This isn't the result of a New Year's resolution or in response to the bearish economy, but because Claudio was one of hundreds of customers allegedly scammed early this year by a Chelsea bill-paying company.

"I'd been going there for years. The owner was friendly," Claudio said of Payments Plus, which is now out of business. "One month I went there and paid $900 for my phone, electric, heat, and DIRECTV, and the next month I noticed none of the bills had been paid. . . . To me, it seems that a lot of businesses here take advantage of Hispanics."

Claudio, like other residents in Chelsea, a city with a large number of immigrants and low-income families, is on edge after a string of consumer scams in the past year. Police, who say the scams are not racially motivated, have investigated fraud allegations at four Chelsea businesses that for years had been operating seemingly without incident.

The complaints have come in like a wave, said Chelsea Police Captain Keith Houghton. The incidents don't seem to be connected, he said.

"It came out of the blue for us," Houghton said. "I think people didn't know where to turn. Eventually some of the community groups that are a great help to us started to see the trends."

The complaints began about a year and a half ago, when the owner of April Appliance, a household appliance store formerly on Stockton Street, told consumers he was going out of business and that they should pay for orders in advance, Houghton said. Consumers hoping for deals, jumped at the offer, most of them paying in cash. Orders were placed to the tune of about $33,000, but the goods were never delivered, Houghton said. The case went to court, where the owner, David Scales, was sentenced to one year of probation and was ordered to pay restitution to the 38 victims, Houghton said.

"It's not a particular race against a race or gender against a gender," Houghton said. "I just think it's crimes of opportunity - people look for something that's more untraceable. When you're dealing with cash it takes longer investigations to track things down."

Many Chelsea residents don't have checking accounts and deal mainly with cash, Houghton said.

Shortly after the April Appliance case came complaints about Payments Plus, which abruptly closed its doors on Washington Avenue around March after years of operation. Residents of Chelsea and surrounding communities who paid their bills at the one-stop shop realized the problem when they received overdue notices from their utility, credit card, cable, and cellphone companies, among others.

Luis Perrone of Chelsea, was one of the first people to contact social justice organization Chelsea Collaborative about Payments Plus. He said he had paid $99 for his electric bill that was never credited to his account.

"That business was a gold mine, I don't understand what happened," said Perrone, who lives above the storefront space Payments Plus occupied. "On a daily basis over 100 people would enter those doors. You wouldn't believe the parade of people, from 7 a.m. to 5:30 p.m. I used them for seven years and never had a problem."

More than 100 people claim to be victims of Payments Plus and owner Robert Cammarata. Houghton confirmed the number of victims, but said he could not comment further because the case is active. He said the district attorney's office is involved with the investigation and is close to beginning the grand jury process.

"I feel like I can't trust anyone," Perrone said. "Too many of these things are happening here."

Also under investigation is Oasis Travel, a travel agency that allegedly took payments but never booked tickets, and allegedly charged tickets to the credit cards of unsuspecting customers. About 30 people have come forward in the past month claiming they were scammed by Oasis Travel, which investigators believe closed its shop on Broadway between two and three months ago. Police said the company may have scammed customers out of $35,000 between May and September alone.

One of the agency's operators, Claudia Quintanilla, was charged with 18 counts of larceny. Chelsea Collaborative officials said they are looking into filing a class-action lawsuit on behalf of the victims.

Medrano Express, a package delivery company with services to Mexico and Central America, is the latest business facing charges and unhappy customers. The company has been ordered by Chelsea District Court to pay $1,370.04 to an East Boston resident who alleged that a package he sent through Medrano Express not only took four months to arrive in El Salvador, but that it was missing a $1,000 LCD television. The court also ordered the company to pay a Chelsea resident $1,639.94 for a package to El Salvador that didn't arrive.

Saugus resident Ruben Orellana claims to be the latest victim of Medrano Express, and said there are more.

Orellana said he used the company's services last year to ship clothes and shoes to his family in El Salvador, but the package arrived late. It was also allegedly missing $400 worth of merchandise. He said he'd purchased insurance, but that since he had lost the receipt, Medrano Express offered to ship another box for him free of charge. Orellana said he agreed, and in August sent his sons Christmas gifts, including 15 video games, shoes, clothes, a video game console and collectible miniature cars. He claims the package arrived two weeks ago and was missing about $820 worth of gifts. Despite having his latest insurance receipt, Orellana claims Medrano Express is refusing to pay, and instead has offered him yet another free shipment. Orellana said he recently filed a small-claims complaint in Chelsea District Court against the company.

"That company is making me look bad to my sons. They think I'm lying to them when I tell them I sent them gifts," Orellana said. "I feel sorry for [Medrano Express] because they are people without a conscience. I'm never going to use them again."

Orellana went on a local radio program asking people to call him if they had problems with Medrano Express. He said two people have already called him. Houghton said police are also looking into these latest complaints.

Medrano Express owner William Medrano denied the allegations by Orellana, but admitted that the company was having problems with delivery delays, particularly to El Salvador. He said those problems have been resolved, and added that the only reason the company lost the two small-claims cases was because he failed to appear at the hearings. Medrano said he will appeal both court judgments.

David Jacobson, a professor of accounting, tax, and law at Salem State College, said the bad economy can lead otherwise honest business owners to justify dishonest behavior. Many of the alleged victims of the four Chelsea companies claimed they had been using the services for years without problems, or that the businesses were recommended to them by family or friends.

"I do think the economy plays a role. It has a tendency to push people over the edge who might not otherwise," Jacobson said. "For instance, when you have a bad economy, small businesses change the way they pay their employees, instead of having salaries with taxes, they pay them under the table. They don't do it because they're terrible people, but because they need the money to survive."

But he is quick to add there are unscrupulous business owners who prey on certain targets.

"It's easier in a place like Chelsea," Jacobson said. "It has nothing to do with being racist, but certain people are easier marks and easier targets because they may not know the language very well and they fear authority. . . . They're going to target lower-income people. Crooks target the easiest marks."

Consumers, he said, should always keep receipts and records of financial transactions. "At least with that you have proof of what happened," Jacobson said.

Katheleen Conti can be reached at kconti@globe.com.