Crimes of Persuasion

Schemes, scams, frauds.

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.

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.

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.

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.

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.

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.

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.

News articles from 2006 about lottery scams.

Lottery Scams