Canadian Sweepstake
Lottery Winnings Program Scams - Foreign Internet Email, Telephone
and International Advance Fee Mail Fraud Lotto Ticket Sales
Scam Victims - 2006
Lottery Scammer Cleans Out Trusting Old
Lady
02/06 - NEW YORK --- Federal agents in New York have arrested
a man who was part of a scam that bilked an elderly Iowa woman
out of more than $200,000.
Authorities said Michael A. Van Houten, 39, of Brooklyn, and others told
the woman she won a sweepstakes and then demanded she pay thousands of
dollars in "taxes" and "advance fees" before she
could claim her elusive prize.
Agents with the Federal Bureau of Investigation in New York took Van
Houten into custody at his home Thursday.
He was indicted in U.S. District Court in Cedar Rapids in January on
18 counts of wire fraud and conspiracy in a case that was investigated
by the Tama County Sheriff's Office and the FBI offices in Cedar Rapids
and New York.
The scam started sometime around July 2002 and lasted until about June
2003, according to the indictment. People involved in the scheme called
the woman and told her she won a large cash sweepstakes but needed to
pay fees upfront before they could send the winnings to her.
They asked her to wire cash payments to New York City using Western Union
and Money Gram and sometimes asked her to use a false name when sending
the money.
To cover their tracks, people involved in the scam told her not to mention
the sweepstakes to anyone, including police, because doing so would disqualify
her from the prize. They also asked her not to keep receipts for the
58 times she wired cash.
"The co-schemers would fraudulently convince the elderly woman to send additional
funds by falsely and fraudulently representing that the taxes and other advance
fees had not been completely paid," said the grand jury indictment.
Court records detail 16 of the transactions, which ranged from $4,000
to $8,000 at a time. Of those, the money was sent from Waterloo 11 times
, four times from Hudson and once from Cedar Rapids.
wcfCourier
11/06 - CEDAR RAPIDS, Iowa (AP) -- A New York man who collected
hundreds of thousands of dollars from an Iowa woman as part of
a sweepstakes scam was sentenced to 14 months in prison.
Michael Van Houten, 39, of Brooklyn, N.Y., pleaded guilty to one
count of wire fraud after originally facing 18 counts. He was ordered
to pay $268,872 in restitution.
"He picked up the money transfers that came from the victim
and brought them to the people running the scam," said Assistant
U.S. Attorney Ian Thornhill.
No one else has been arrested in connection with the scheme, but
the investigation is ongoing.
People involved in the scam sometimes asked their victim to use
a false name when sending the money and told her not to mention
the sweepstakes to anyone, including police, because doing so would
disqualify her from the prize.
Montreal police bust telemarketing fraud ring - Victims shelled
out between $1,500 and $65,000 in scams that included fake lottery
12/06 - CTV - Early Tuesday morning, officers with the Centre
of Operations Linked to Telemarketing (COLT) fraud, led by the
Royal Canadian Mounted Police, swooped down on "boiler rooms" used
to make misleading telephone calls to potential victims and conducted
about 50 searches.
"We had to stop this crime from being committed at this point,
because a lot of seniors -- mainly in the U.S. -- were losing their
life savings," Montreal police Const. Sylvain L'Heureux told
CTV News.
"Several suspects are expected to be arrested on fraud charges," the
RCMP said in a statement.
Since 2003, this organization allegedly victimized 500 people
a week, grossing between $8 million and $13 million annually. An
unknown number of victims have lost $1,500 to $65,000 each after
they were convinced to pay by a variety of schemes, according to
the RCMP.
Telemarketers would contact people throughout North America to
convince them to pay fake taxes, buy medical kits or subscribe
to lotteries, according to police.
Some victims mortgaged their houses to pay fees demanded by marketers.
About $20,000 in cash was seized in the raids.
Western Union management has also agreed to collaborate with COLT
by closing seven agent locations in Montreal that have been used
to transfer money generated through fraudulent telemarketing.
"We do believe that some of those locations were involved
in the fraudulent payouts, so to protect consumers and prevent
any further losses, we are voluntarily closing those locations," said
company spokesperson Sherry Johnson.
Two additional places with business licences from another company
specializing in electronic money transfers will also be searched
by the investigators.
L'Heureux said the most flagrant fraud scheme involved a fake
lottery.
The telemarketers would call people telling them they were winners,
and that they needed to pay a tax ranging from $1,500 to $60,000
in order to collect their winnings. Approximately 90 per cent of
the victims in this case were over 60 years of age.
L'Heureux said what was particular about this scheme was that
most of the victims are in the U.S., while all the criminals are "home
grown."
Further, police are seeing more and more hardened criminals becoming
involved in telemarketing schemes.
"Most of the people that were arrested today (were arrested)
without warrants, and most of these people have criminal records
related to violence or drugs," said L'Heureux.
In the mass telemarketing schemes, the fraudsters used various
methods including telling people they were eligible to receive
a $7,000 grant, or selling health care kits to companies or billing
them for services never rendered. Businesses were also targeted
and told they had to buy expensive first aid kits to comply with
new federal safety regulations, police allege.
"The common feature to every scheme in this kind of fraud
is that the victims are asked to pay less than $500. And all telemarketing
schemes require that the victims send money in the form of a certified
cheque or money order," said the RCMP.
The Phonebusters Canadian anti-fraud call centre estimates that
500 to 1,000 criminal telemarketing boiler room operations are
conducted on any given day in Canada, grossing about $1 billion
a year.
Scam Artist Goes to Jail for Bilking Elderly in Telemarketing
Lottery Fraud
09/06 - TAMPA - More than a dozen elderly victims will receive
part of $200,000 in restitution from a man who pleaded guilty Monday
to managing a telemarketing lottery scam.
Vasilios "Billy" Kolitsidas, 38, was sentenced to just
over 51/2years in prison by U.S. District Judge James S. Moody
Jr.
The judge gave Kolitsidas credit for time served in a Canadian
prison while he awaited extradition to the United States on charges
of conspiracy to commit mail and wire fraud and money laundering.
He must serve another 21 months to complete his sentence.
As part of a plea agreement, Kolitsidas turned over $200,000 in
restitution.
His attorney gave prosecutors a check at the hearing.
He also must forfeit another $337,000.
Kolitsidas pleaded guilty to his role in a sweepstakes and lottery
scheme that scammed more than $1.6-million from victims across
Florida and in South Carolina.
An indictment charged him and Serges Jacques Descent, also known
as Jack Descent, with persuading 14 people to turn over thousands
of dollars in fees and taxes between October 1998 and September
1999 for winnings that never existed.
"I would like to take this time to apologize sincerely to
all the victims and their families that were involved, and for
all their unjustly suffering," Kolitsidas told the judge.
The telemarketing firm targeted older people who had previously
entered sweepstakes contest or been the victims of fraud.
The men said they were calling on behalf of the Canadian government,
pretending to disburse winnings, prosecutors said.
The catch: taxes and fees had to be paid first.
The men would have the victims send checks to an address in Montreal
and a St. Petersburg address to a company called Group Crown International
Inc.
In one scam detailed in court papers, 79-year-old Ada Korf was
told she won more than $1-million.
She sent four checks totaling $429,000 to the St. Petersburg address
and was told if her bank asked about the money, to say she was
investing in Florida real estate.
Descent, who Kolitsidas said approached him about "investing," is
serving 10 years in prison.
St. Petersburg Times
Montreal scam artist fraudsters bilked seniors of millions -
ringleader wanted by U.S.
01/08 - Several Montrealers, including a 43-year-old Hampstead
resident alleged to be the ringleader, face charges in the U.S.
alleging they were part of a fraudulent telemarketing outfit that
targeted vulnerable seniors.
An indictment filed recently in U.S. District Court in Los Angeles
provides details of an eight-month investigation that ended Dec.
19, 2006, when 200 police officers, led by the RCMP, rounded up
39 people and shut down two boiler rooms in Montreal.
Twenty-two people, almost all from Montreal, face 25 counts of
wire and mail fraud in Los Angeles. They also face a specific charge
alleging they committed telemarketing fraud against the elderly.
In the U.S., telemarketers who cheat the elderly can have 10 years
added to any other prison sentence they receive.
The U.S. Justice Department intends to file extradition requests
soon, an RCMP spokesperson said yesterday.
Among those arrested in Montreal more than a year ago was John
(Pizza Man) Bellini, 43, of Hampstead. The 28-page indictment portrays
him as the leader of a group of telemarketers alleged to have bilked
elderly people in the U.S. and Canada out of millions.
The indictment describes how Bellini once laughed and called one
telemarketer "a funny f--k" after the telemarketer joked
that one of the elderly victims "has the worst case of Alzheimer's
I've ever seen in my life." As part of the scam, telemarketers
identifying themselves as lawyers or lottery officials would tell
their victims they had won a lottery but had to send money to cover
administrative fees if they wanted to collect their winnings. Victims
sent money ranging in amounts from $1,500 and $60,000.
According to the RCMP, the telemarketers went after 500 people
per week and bilked victims out of $5 million to $10 million annually
between 2003 and 2006.
Bellini faces four weapons charges in Montreal after police seized
a prohibited firearm during the Dec. 19, 2006, raid. The arrests
were made as part of Operation Civil, an investigation by Project
Colt, a joint task force based in Montreal that includes several
Canadian and United States law-enforcement agencies.
In 2001, Bellini was sentenced to a 30-month prison term after
he pleaded guilty in Montreal to drug trafficking.
The U.S. indictment alleges "Bellini served as the organizer
and leader of the telemarketing operation." He is alleged
to have obtained leads, or lists of names and phone numbers of
potential victims, from Rayme Freedman, 26, a Pierrefonds resident
also charged in Los Angeles.
"Working from the leads, at the direction of Bellini, the
defendant telemarketers would contact victims and falsely inform
them they had won a large sum of money in a sweepstakes or lottery," the
indictment states.
Bellini is also alleged to have supplied cellular phones used
to contact victims, provided the facilities from where the calls
were made, and trained rookie telemarketers on how to pitch scams.
Victims paid the "administrative fees" through money
counters like Western Union and MoneyGram. Five of the people charged
in Los Angeles are alleged to have run such counters in Montreal
and were in on the scam.
Western Union and MoneyGram closed the outlets when Operation
Civil was carried out.
The Gazette
Elderly Lottery Scam Victim Loses $200,000 But Recovers $10,000
01/06 - Wisconsin - A $10,000 check was returned Jan. 10
to an 83-year-old Onalaska widow who fell victim to Canadian con
artists claiming she won a Canadian lottery.
Special agents from U.S. Immigration and Customs Enforcement believe
the elderly woman lost hundreds of thousands of dollars of her life savings
to the Canadian telemarketing scam artists, who prey on senior citizens.
An $18,000 check was intercepted in Toronto and returned to the
woman last August.
The checks were recovered by Project COLT, a multi-agency joint initiative
targeting telemarketing fraud, including Immigation and Customs, the
Royal Canadian mounted Police, the FBI and the U.S. Postal Service Inspection
Service.
The victim was contacted by Canadian telemarketer con artists who claimed
to be attorneys and government officials. They convinced her she had
won the lottery and instructed her to send money to cover the insurance
and taxes on her winnings before the money could be released.
Immigration and Customs agents believe the woman sent more than $200,000
in cashiers checks, Western Union, Money Gram and standard mail to the
con artists.
The scam artists are difficult to capture because they frequently change
phone numbers, ICE spokeswoman Gail Montenegro said.
Agent-in-charge for the Immigration and Customs Enforcement’s Milwaukee
office, Brian Falvey, warned Wisconsin residents to be cautious about
telemarketing scams.
He estimated the scams have already robbed people, especially senior
citizens, in the U.S. of tens of millions of dollars.
“ These sophisticated and convincing con artists appear trustworthy to
their elderly victims who aren’t used to such deceitful tactics,” he
said.
Immigration and Customs Enforcement reported that telemarketing fraud
targets elderly citizens who are often least able to recover from financial
loss.
The victims are told that they will receive amounts varying from thousands
to millions of dollars in lottery winnings.
La Crosse Tribune
Port Charlotte man out $2,400 in lottery winnings scam
Florida - 06/06 -- A Port Charlotte man told police he lost $2,400
in a scam after a lottery-related check cleared his bank.
Gomez Guadalupe, 46, told authorities that on June 1 he received
a letter in the mail from Ontario Lottery and Gaming Corporation
in Canada informing him that he had won $240,000 in the North American
Sweepstakes Lottery.
Enclosed with the letter was a $2,945 check that he was to deposit
into his bank account to expedite the process, the police report
said.
The letter asked him to wire $2,400 in cash via Western Union
to David Lopez of 123 Main St. in Ajax, Canada, to pay for the
taxes on his winnings.
Guadalupe told police that he checked with Wachovia Bank, where
he deposited the money, to make sure the Ontario Lottery $2,945
check had cleared. He said a bank representative told him it had.
He then withdrew $2,400 on June 6 and sent the money via Western
Union to Lopez.
On June 13, the bank informed Guadalupe that the $2,945 check
he had deposited was canceled and that he owed the bank the money
he had withdrawn, the police report said.
Guadalupe told police that Wachovia closed his account, and now
he has had to set up a payment plan to pay the bank the money he
owes.
The bank told Guadalupe he had fallen victim to a lottery scam,
according to police report.
Guadalupe told police that he had not tried calling anyone at
the so-called lottery office before he wired the money and that
the phone numbers provided to him are no good.
Sarasota Herald-Tribune
07/06 - CONCORD, N.H. -- (AP) - A Canadian man who pleaded guilty
to defrauding elderly widows and widowers in the United States
in an international telemarketing scheme has been sentenced in
federal court in New Hampshire to over six years in prison.
Adhemar Baptiste of Montreal was part of a group of Canadians
indicted in 2002 after an investigated that included the FBI and
Royal Canadian Mounted Police revealed the group defrauded about
80 victims by telling them they had won large lottery prizes but
had to prepay Canadian taxes and fees to get the cash.
Some of the victims affected by the fraud were in New Hampshire.
Losses exceeded $8 million and $6.4 million in restitution was
ordered. Baptiste's share of the obligation was more than $1.5
million.
Baptiste was sentenced Monday to 78 months in prison.
At least six others have been sentenced in the case. Sentences
have ranged from one year to 10 years.
Phone scammer needs good defense attorney.
09/07 - CONCORD, N.H. (AP) - A man from Montreal, Canada, has
pleaded guilty in New Hampshire to conspiracy to commit wire fraud
stemming from a telemarketing scheme originating in Canada and
targeted toward U.S. citizens.
Corey Richard Fleischer faces a maximum sentence of 15 years.
The prosecution started in 2002, when a grand jury in New Hampshire
indicted 15 Canadian citizens in connection with a nationwide telemarketing
fraud targeted at the elderly. Seven defendants are serving sentences
in federal prison, three are awaiting trial and two are fugitives.
One case was dismissed and one defendant wasn't prosecuted because
Canada would not extradite him.
Elderly woman loses life savings to lotter scam artists
01/07 - She lost it all. An elderly woman is about penny-less
because Houston police say she trusted her life savings to a person
promising a fortune in return.
Mrs. Edgar was scammed out of her life savings.
And there have been reports of other victims who received a slick
telephone sales pitch from the voice who claimed to be, “president.”
For 85-year-old Lorene Edgar, it was a costly ordeal that spun
out of control.
Mrs. Edgar was the victim of a scam.
“Makes me feel about that high, so humiliated and shamed,” she
said.
It all began with a phone call from someone claiming to be with
the Jamaican Lottery.
“And he said, ‘Ms. Edgar I’ve got good news.
You have won sweepstakes for 2 million point five’,” she
explained.
Only, the man told her in order to receive the cash prize, she
had to send money.
So Edgar wired $1,500 and wired thousands more over the next two
weeks.
“I just can’t believe that they could talk me into
this and I just kept sending it.”
Edgar even believed it when a man claiming to be the Jamaican
president called.
“He kept talking and all and all and finally, I guess, gave
in because I sent some more money.”
Edgar eventually unplugged her phone when the harassing phone
calls wouldn’t stop. Only then would she realize she had
been taken.
“It’s still heartbreaking,” said Houston Police
Sergeant Mike Williams.
Sgt. Williams said crimes like this are nearly impossible to solve,
since anyone can claim the wired money anywhere in the world. And
all too often, it’s the elderly who are targeted.
“We are seeing a lot of this going on,” Sgt. Williams
said.
Lorene Edgar lost about $16,000, her entire life savings.
And perhaps even more troubling, HPD’s financial crimes
unit receives an average of 1,300 calls a month about lottery and
phone scams.
Sadly, Mrs. Edgar was saving to pay for her own burial expenses,
so that her children wouldn’t have to.
KHOU.com
Potential Victim Eludes Fake International Lottery Check Scam
CA - 05/06 — John McLeod is little wiser after nearly falling
for a lottery scam.
"If it sounds too good to be true, man, believe it. It goes
back to that old cliche," McLeod said.
The Covina man got a notice in the mail two weeks ago saying he
won $165,438 in an international lottery, but first had to pay
a clearance fee and taxes of $2,750 as required by federal and
international laws.
The fee could be deducted from his winnings, according to the
notice from the prize director of Uni Trust Inc. They would send
him two checks. McLeod was leery but said he remembered signing
up for an international lottery couple of years ago.
"In my greed (I was) thinking I could use $162,000 right
now,"
McLeod said, adding he just bought a business in October, Monico's
Beauty Salon & Supply in Azusa.
He received a cashier's check for $2,950 from Banner Bank in Washington
state on May 10 and was supposed to wire back $2,750 to a Jeri
Lindsey via Western Union. He was told Lindsey was the boss of
Michael Howard, his contact from the prize department. McLeod would
supposedly get the balance of his winnings the following day.
He called the number on the check for Banner Bank and talked to
a woman who said she was from customer service.
"What bank has customer service at 7:30 a.m.?" he said.
McLeod deposited the check May 11 at Bank of America and asked
the bank to verify if it was good. He was told they couldn't because
it wasn't a Bank of America check and it would take up to six days
to clear.
He later called information for phone numbers for Banner Bank
and reached an employee who told him the lottery was a fraud and
that she'd been getting dozens of calls all day, mostly from Kansas
City.
"First thing she asked me was if I wired them the money.
I said no. She said, 'You're one of the lucky ones." I feel
relieved. I couldn't afford a hit like that."
McLeod went to Covina police.
Lt. Pat Buchanan said the scam was perpetrated through the mail,
which falls under the jurisdiction of the U.S. Postal Inspection
Service and that McLeod must call that agency.
The number on the "winning notice" sent to McLeod comes
back to a cell phone in New Westminster, British Columbia, Canada.
A man who answered the phone on Monday identified himself as Michael
Howard and said Uni Trust Inc. isn't in Canada.
When told the check sent to McLeod was bogus and had the same
routing number used in several counterfeit cashier's checks, Howard
denied the check came from his company.
"If the money is not good it's not from this company," he
said. "What do you want me to do? Maybe you got a check from
other companies."
The phone number on the fake cashier's check reaches a recorded
message telling callers to leave a message and someone from customer
service will call them back. No one returned a phone message left
Monday.
Ramona Moffat, assistant vice president and fraud investigator
for Banner Bank, said this kind of fraud has been going on for
years. Banner Bank last year notified the Federal Deposit Insurance
Corp. that counterfeit cashiers checks bearing the bank's name
were in circulation and mentioned the routing number used. The
FDIC issued an alert.
That routing number appears on the check sent to McLeod.
Thousands of banks have been hit by the widespread scam, Moffat
said, and the FDIC has issued similar alerts to many other banks.
Long Beach police say international lottery scams are common,
but they have not had reports of this particular scam.
"It comes for awhile and goes away," she said. "Some
of the checks are very similar (to Banner Bank's), some very dissimilar." She
suggested that people file a complaint with the Federal Trade Commission.
"And use good common sense. No. 1, you don't pay up front
for a lottery," Moffat said.
Press-Telegram.com
Two Edmonton drug addicts were sentenced yesterday for helping
the local kingpin of a lottery scam bilk 94 U.S. victims - most
of them seniors - out of more than $368,000.
03/06 - Alberta - Two cokeheads were paid partly in drugs for
helping the local kingpin of a lottery scam bilk nearly 100 U.S.
victims - most of them seniors - out of more than $368,000, court
heard yesterday.
Connie Peters, 39, and Miles Strong, 42, pleaded guilty to fraud
over $5,000 for their roles in the scam, which robbed some of the
elderly victims of their entire savings.
Update: 04/06
Miles Strong, 42, was handed a 30-month prison term while Connie
Peters, 39, sobbed as she was given a two-year conditional sentence
to be served in the community.
Provincial court Judge Michael Stevens-Guille described the lottery
scam as "the cowardly preying upon innocent people for greed" and
to feed a cocaine habit.
Although Strong and Peters were not the brains of the operation
and were used merely as runners, Stevens-Guille said they were "an
integral part of the fraud" and they were not "ignorant
of what was going on."
The pair pleaded guilty on March 30 to fraud over $5,000.
Court heard the scam robbed some of the elderly victims of their
entire savings, including Virginia resident Eugenia Fleet, who
was 92 when she lost nearly $60,000 to the fraudsters before a
family member alerted the FBI. Fleet has since died, said Crown
prosecutor William Pinckney.
Prosecutor Bill Pinckney said scam mastermind Brian Thompson used
various cellphones to make calls to his victims in the U.S. between
June 2001 and August 2002.
Thompson, who was handed a four-year prison term in August 2003,
would tell victims they had won a lottery in Canada, but needed
to send cash to access their winnings.
The victims were instructed to wire the money through Western
Union, making the transfers payable either to him, Peters, Strong
or others accused in the case.
Peters and Strong would pick up the cash at city MoneyMart outlets
and bring it back to Thompson.
The agreement was that he would give them 10% of what they picked
up, but he often paid them in cocaine or crack cocaine instead,
court heard.
Peters made 33 pickups totalling $22,835, while Strong made 83
pickups totalling $129,930.
Stevens-Guille noted Strong was not co-operative, has shown little
remorse and was deemed unsuitable for a community-based sentence.
Peters was placed under house arrest for the first 12 months of
her sentence and a curfew for the balance. She must also perform
180 hours of community service.
Co-accused, John Peters, is slated to be sentenced in August.
A fifth accomplice, Stephen Sutherland, was handed a 30-month jail
term in August 2003.
Update 08/06
A man has been hammered with a 27-month prison sentence for his
part in a massive lottery scam that bilked 94 U.S. victims - most
of them seniors - out of more than $368,000.
John Dale Peters was slapped with the prison term this morning
in provincial court.
EdmontonSun.com
Brinks to bring lotto winnings if you pay advance fee.
08/07 -Almost every day, as many as three dozen times a week,
Renee Caton gets letters saying she won prizes ranging from a few
thousand dollars to millions. Most of them contain checks, usually
with six- or seven-figure totals on them.
The letters and the checks all end up in the wastebasket. It's
not that Caton and her husband Jonas, a Valparaiso firefighter,
couldn't use a little extra cash. It's that she knows that, despite
all the important and official-sounding names on the letterheads,
they are all scams.
"I've never responded to any of them, but I keep getting
notices," Caton said. "They just don't quit."
Some have called when she didn't respond urging her not to miss
out on the millions she has won. One outfit calling itself All-American
told her she won $1.5 million in the Australian Powerball drawing.
They even paid the $60,000 in taxes on her winnings, and all she
had to do was send them $575.60 in processing fees, the caller
told her.
Caton was instructed to make out a Western Union money order and
give the money to the Western Union delivery person when he delivered
the winnings to her Center Township home. They called again to
ask if the delivery man had arrived. Told he hadn't, the caller
said the delivery man would call soon, and Caton should just send
the money.
She didn't, and that was the last she heard from them or the alleged
delivery person.
Another outfit, calling itself National Clearinghouse in Canada,
called to say a Brinks truck was bringing her prize. All Caton
had to do was pay $2,500 for a duty tax and a $60 handling fee.
The caller left the number of the American embassy in Ottawa and
called every day for several days until Caton contacted the embassy.
Then the calls stopped.
"I told the sweepstakes person to deliver the money, and
I would give them the money to cover (the duty tax and handling
fee). They called to say the truck was held up and to just send
the check. I told him we'll wait. It never showed."
The Catons hoped the truck would show up, but not because they
expected to collect a big prize. At least, not a monetary one.
Jonas Caton made arrangements with fellow firefighters that, if
anyone showed up, they would block the scammer's vehicle until
police could be summoned.
"We called the police and the prosecutor, but neither of
them said they handle that sort of thing," Renee Caton said. "I
called the Better Business Bureau and gave them the information."
One of the latest notices she received included a check from "Publishers
Clearing" for $4,500 that she was instructed to cash and then
return $2,500 to cover the taxes on her prize. She called the bank
and discovered the company's account had no money to cover the
initial amount. When she called them to ask about it, they hung
up, she said.
nwiTimes.com
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