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ONTARIO: Fraudster duped Canadians out of $1.3M in business directory scheme

Judge calls Tobermory man's 'materially misleading' telemarketing and 'final notice' schemes deceitful and deliberate, designed to have air of authenticity
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A man who apologized to a U.S. court and said he was embarrassed for running a telemarketing scheme that fooled Americans out of more than $2 million, then turned back to Canada to do it all over again, has been handed a 30-month sentence.

Terry Croteau was also ordered to pay nearly $1.3 million in restitution to businesses he duped out of cash under the guise of providing information for to a business listing or being under threat of having their credit rating harmed by a collection agency. He was also fined $12,461.

Croteau, 48, had earlier pleaded guilty to fraud over $5,000 and uttering a forged document along with using deceptive telemarketing under the Competition Act.

The 30-month sentence for each charge was to be served concurrently.

During sentencing on Thursday, Ontario Superior Court Justice Michelle Fuerst called his “materially misleading” telemarketing and “final notice” schemes deceitful and deliberate, designed to have an air of authenticity.

“Many thought they were simply verifying or updating information,” Fuerst said. “Mr. Croteau knew that these telemarketing calls were misleading."

Croteau ran an online scheme in Barrie from 2012 to 2019, using employees to sign up 2,345 businesses under the guise that they were simply updating information for a listing made to resemble the Yellow Pages model, complete with walking fingers.

But the businesses were charged $299.99 to $599.99 every month, plus tax, with renewals every six months. 

He ran a telemarketing scam along with circulating a “final notice” letter claiming to be from a legitimate collection agency.

When Croteau started receiving complaints from the businesses, police and the Better Business Bureau, he started using aliases.

He also made changes to the form, but Fuerst said they were still purposely misleading.

Court heard that Croteau had dual Canada-U.S. citizenship. He had earlier targeted businesses in the United States with a telemarketing scam with a similar premise. Businesses believed they were providing updated information for pre-existing listings.

He pleaded guilty to several charges in 2006 in which American-based businesses lost $2.9 million. He received a sentence of 151 months with five years of supervised release. He was to pay restitution and not leave the district.

He did serve five years and three months in an institution and, when he was released, he returned to Canada where he launched the scheme all over again.

Croteau had last been living in Tobermory, north of Owen Sound on the Bruce Peninsula, where he and his wife have a cleaning business.

Fuerst said the fraud charge carries a maximum penalty of 14 years and that substantial jail sentences are generally imposed.

The aggravating factors, she added, included the planned and deliberate nature of the deceitful activity that attached to it an air of authenticity by pretending to be associated with well-known organizations.

Fuerst pointed to the aliases Croteau used, along with name changes of the business when complaints started coming in, as well as the nearly $1.3 million that he took from the unsuspecting businesses.

Then there was his criminal record and his history of running that deceptive telemarketing scheme in the U.S., which failed to deter him.

Mitigating all that was his guilty plea, which Fuerst said saved the court valuable time, his expression of remorse and support shown by community members who had written letters.

The ultimate goal in sentencing is to send a message of denunciation, “that such conduct will attract a significant sentence,” Fuerst said in sentencing him to prison, ordering he pay back the money and fining him.