WASHINGTON – When Leon Hersom of Acton, Maine, received a phone call in 1997 informing him that he won $1 million from a Canadian lottery, he thought his problems were solved. The 82-year-old retired lumber merchant suffers from congestive heart failure and requires constant medical attention.

Eager to pay his bills and help his family, Hersom did not realize he was one of thousands of senior citizens in this country who have fallen victim to a growing epidemic of cross-border telemarketing and direct-mail frauds.

Hersom was asked to wire $2,700 to a Canadian firm to pay for the “taxes” in order to claim his prize. He received repeated demands for these “fee” payments, totaling more than $15,000. Hersom never saw a penny of the “prize,” nor did he see his “fees” again.

Canada has recently become a haven for white-collar crimes of this sort. It has become a matter of such national concern that the Senate Permanent Subcommittee on Investigations held a hearing Thursday to find ways to eradicate this crime.

“The impact of such frauds upon the lives of ordinary Americans can be devastating – both to their finances and to their pride,” said Sen. Susan Collins, R-Maine, the highest-ranking Republican on the committee who initiated the investigation.

Collins pointed out that American senior citizens are over-represented among victims, as they are the most likely to trust a friendly voice over the phone. Hersom’s wife, Ann Hersom, who was present as a witness, told lawmakers she had to take away his checkbook and credit cards.

“He still believes he will receive the lottery money,” she said.

The couple, along with many Americans, did not know that international lottery prizes are illegal, and that no one has to pay fees to win sweepstakes prizes.

Hundreds of “boiler rooms” operate in Canadian urban centers sporting dozens of phone lines and numerous callers who work 16-hour days and scam large sums of money from vulnerable Americans. Many such operations are part of vast networks that share information on profitable preys, the so-called “sucker list.” These operations use sophisticated means of circumventing the law, such as Western Union money transfers, mailbox drop-offs, caller-ID blockers, and even people who personally pick up the payments.

The U.S. Department of Justice works closely with the Canadian government to track down and thwart the fraud operations, but more must be done, witnesses said. Ontario Detective Sgt. Barry Elliot said such telemarketing schemes are tough to track down and prosecute. Victims are often elderly, eager to accept a windfall to bolster a fixed income, but too embarrassed to report being cheated.

Furthermore, the fines levied against the perpetrators who are caught are seldom collected.

Telemarketing fraud is not a problem in Canada due to the Canadian government’s effective educational campaigns to protect their own citizens from falling for such deals. The Toronto, Montreal and Vancouver-based fraud rings prey on Americans because they are not as informed, and because Canada itself has done little to penalize this kind of crime.

“There is a lack of Canadian federal ownership and leadership of anti-fraud programs,” Elliot said.

The hearing focused on possible measures to educate the public to avoid falling victim to scam artists. Maine’s attorney general works with the state’s media to educate the public about this type of crime. Newspapers run cautionary columns that warn about bogus loan offers in the classified ads, offers that guarantee “loans” in return for advanced fees.

“People who were denied credit at legit institutions become very happy to know they have been approved by scam artists,” said Will Lund, director of the state’s Office of Consumer Credit Regulations. “It is very sad, as these are people who are broke, and can least afford to be scammed.”

Lund’s office holds presentations for the elderly, high school students and displaced workers to warn them of scammers who could try to benefit from their situation. He also works with courier services, a major conduit of fraud transactions.

“It is ultimately consumer knowledge and awareness that will reduce fraud crimes,” he said.

Mrs. Hersom continues to receive numerous unsolicited phone calls and letters every day. She said she has learned the hard way how to deal with the smooth-talking swindlers. And not without a sense of humor.

“I tell them I’ll go get my husband and ask them to wait a moment. Then I place the phone on the counter and walk away,” Hersom said.