Puzzle Scams

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Fraudulent Puzzles for Prizes Sweepstakes Scams

Treasure Express and Puzzles N' Prizes sent out mailers with names like Magic Money Maker, Count Your Cash, Take Home The Cash, Money By Mail, and Stuff Your Pockets.

Each contest started with an extremely easy "puzzle" —such as simply adding several numbers —that you would "solve" and return along with an entry fee. Then, simple follow-up puzzles were sent to you, each one assuring you that "you have worked hard and qualified for this Official Playoff Puzzle," have "made it to the big one," or were otherwise uniquely placed to win the final contest —if you only enter and pay again.

The entry fees ranged from about $5 to $35, but collectively some victims lost $4,000-$6,000 because they were deceived into entering time, after time, after time.

The subsequent puzzle mailings often contain a "Publicity Release" or "Authorization Certificate" asking you to authorize publication of your name as winner, or to designate your preferred form of payment to receive your award.

If you do not return additional entries you are sent "Emergency Memos" warning you that the money will be given to somebody else if you do not respond immediately.

You continue to return puzzles and additional entry fees until the puzzles, at the final level, become unexpectedly and exceedingly difficult, requiring government cryptographers and supercomputers to solve.

People are manipulated into spending years of effort and money on these contests, yet the only thing they win is a chance to enter another one of the contests. Although these contests may be referred to as sweepstakes, they are not. You must both pay and submit puzzle solutions to enter. Some contests have no expiration date nor an apparent end or winner.

Legal But Deceptive

In the Matter of the Complaint Against 

248A North Higgins
Boxes 521, 522, 523, 524 and 525
Missoula, MT 59802-4459

P.S. Docket No. FR 98-286  March 26, 1999


The Complaint alleged that Ronald J. Ellis and J. R. Publishing violated 39 U.S.C. §3005 by engaging in a scheme or device for obtaining money or property through direct mail by means of false representations and were using the mail to conduct a lottery during 1997/98.

The Postal Service presented testimony from a Postal Inspector; two consumer witnesses; and an expert witness, Dr. Terrell Williams of Western Washington University, who specializes in the study of consumer behavior.

Ronald Ellis of Las Vegas, testified on his own behalf, denied making any false representations, or that they were conducting a lottery. He also presented expert testimony from Dr. Ned Silver, a psychology professor at the University of Nevada Las Vegas; and Dr. Edwin Nagelhout, a professor of English at the University of Nevada Las Vegas, who specializes in writing and linguistics.


They used several different names to identify the puzzle contests, including "Winners Millions," "Money Train," "Gateway to Riches," and "Cash Express."

Contestants were directed to send entry forms, along with a fee – either $5.00 or $20.00, depending on which contest one enters.

Each contest consisted of three stages. To win the grand prize, a contestant must receive the highest score of all entries submitted for a specific contest. Lesser prizes may be awarded for other high scores. The puzzles for the first two stages are extremely simple, requiring the barest minimum education and intelligence to solve correctly.

The third stage puzzle is much more difficult. It has the appearance of a crossword puzzle, but there may be several "correct" words that could used in any particular space. Each letter of the alphabet is given a numerical value, and a contestant’s score is determined by the total value of all the words used in filling out the puzzle. .

The stage-one puzzle was sent to prospective customers as part of the initial solicitation.  A stage-two puzzle was purportedly sent to any contestant who successfully completed stage-one, and likewise sent a stage-three puzzle to anyone who successfully completed stage-two.

This was explained, although not at all clearly, in the "Official Rules," printed on the reverse of the solicitation forms. In actual practice, however, the orderly procedure described above was not always followed. They often sent multiple copies of the same original solicitation, or several of the stage-one puzzles of the various different contests, to the same people.

They also offered contestants an opportunity to purchase a "bonus option" after the stage-one entry is received, and before the stage-two puzzle is sent. For an additional $20.00 fee, you were told that the value of the grand prize would be increased to $15,000.00.

Refunds were given upon request or complaint  from consumers who had believed they were entering a sweepstakes or who believed they had already won a prize.

In the "Official Rules," found on the reverse side of the solicitations, it stated, "This is not a sweepstakes, lottery, or telemarketing promotion. It is a contest of skill involving no luck or chance."

The Alleged Misrepresentations

The mailing suggested that you had won; were guaranteed to win; had been selected to win; needed only to complete the word puzzle and to mail it with a judging fee to win; were one of a very limited number of persons who have been approved to be eligible for; a cash prize.

There are many features that suggested to the more gullible reader that he/she had won a large cash prize such as the dollar amount of the prize, usually $10,000.00, printed in large red type, with the words "Guaranteed," "100% Guaranteed," "Confirmed", or "fully Guaranteed" used many times, and always highlighted or underlined, nearby.

Some of the return envelopes also implied that the recipient has already won. E.g., One was stamped "APPROVED" over the words, "Cash Access Documents for Immediate Processing." and stated "Let me repeat that, Helen. You are guaranteed $10,000.00 Cash as our sole Grand Prize Winner!"

While the fact that they were actually inviting recipients to participate in a puzzle contest was spelled out on the reverse on each solicitation, this essential information was likely to be missed by the less-than-careful reader.

It was determined that an individual might send in as many as six completed stage-one and stage-two entries but receive only one stage-three puzzle.

With the many exhortations to hurry and mail the entry fee before a specified deadline, gullible readers are likely to believe that all they need do is to complete the elementary stage-one word puzzle and send the money. People are more likely to pay the required "fee" if they believe they have won, or are certain to win, a large cash prize.

In some cases, the solicitation quite strongly implied that obtaining $10,000.00 was that simple. E.g., "By following the instructions below and enclosing your one-time $20 judging fee, your $10,000.00 Cash eligibility determination will be finalized Helen. This will begin your immediate processing for the payment of the $10,000.00 Grand Prize, . . .."

They argued that most people understood that the use of the words "eligible," and "nominee" informed them that they had not yet won a prize.

It was felt however that the less careful, more naïve reader, even if they understand those words, may overlook their meaning in this context, or may simply ignore those words, having already focused on the message that they were going to win a prize.

The law protects such people by judging a solicitation on the overall impression it makes on them. As is evidenced by the many letters of complaint, these solicitations were very capable of giving a false impression.

The tone of familiarity in the solicitations, including the repeated use of the addressee’s first name; the use of personal "identification numbers;" references to "our records," concerning the addressee’s name and address; references to the addressee as a "target candidate," and efforts in "locating you;" the terms, "private," and "confidential" on the envelope; statements that "I have been instructed to inform you;" reference to the addressee as the "sole validated claimant;" and reference to a "specially prepared envelope;" all are demonstrative of an attempt to lead the recipient to believe that he/she has been specially identified and selected.

Far from being a part of a select group the names and addresses were obtained by purchasing mailing lists from a New York company and the likelihood of your winning a contest or receiving a large amount of cash was far greater than was the fact.

Many statements indicated how easy it was to receive the large amounts of cash. E.g,  "By simply following the instructions," "It is as easy as 1-2-3;" "This is not a fluke and there is no luck involved!"

While the gullible reader was led to believe that all he/she need do to collect the prize was fill out the form, write the $20 check, and mail it in the actual chance of winning the $10,000 or $15,000 was very small.

The rules, if accurate, suggested that they would collect approximately $900,000 and pay out only $20,050. The figures in some of the other solicitations are even more outrageous. One says that while approximately $2,250,000 would be collected, only $20,050 would be paid out while another says that approximately $1,375,000 would be collected, and only $13,750 paid out.


The Lottery Allegation

1. The elements of a lottery are prize, chance and consideration.

2. The elements of prize and consideration are clearly present here, but it was not proved that prizes were awarded based on chance. The fact that some of the consumers who complained may have believed they were participating in a lottery, or sweepstakes, does not make it one. The same evidence that proves the false representation allegations tends to disprove the lottery allegation.

False Representation Allegations

3.Respondents’ solicitations must be considered as a whole and their meaningdetermined in light of the probable impact on the mind of the ordinary recipients to whom they are directed.

4. The statute (39 U.S.C. §3005) is intended to protect the gullible, less critical reader, as well as the sophisticated and the wary. Representations may be false, within the meaning of §3005, even if many of the statements in a solicitation are literally true. "This section forbids representations that are false or artfully designed to mislead."  It is the net impression likely to be made by the solicitation that determines whether false representations are made.

In this case, a careful reader may well realize that they were promoting a puzzle contest, but the overall impression created was that the recipient had been selected to win a cash prize. Though it was argued that the "ordinary consumer" would read and understand the solicitations, they were found likely to mislead a gullible reader of which evidence demonstrates that there are many such people.

While there is nothing to prohibit them from marketing puzzle contests, the law requires them to adequately identify their product.

5. Solicitations themselves are the best evidence as to what representations are made, the use of lay or expert testimony is not required, and the receipt of consumer complaints is not necessary to prove a violation of 39 U.S.C. §3005.

6. Solicitations that are ambiguous or capable of more than one meaning are misleading if one of those meanings is false. It is not difficult to select words that will not deceive.

7. The recipient of a direct mail solicitation is not required to carefully scrutinize every sentence to determine what is being offered.

8. A solicitation may be deceptive because it makes statements that are untrue, or because it omits information that should be disclosed. It is the total impression on the reader, or recipient, that must be judged.

9. An inconspicuous disclaimer is not sufficient to overcome the overall impression made by an advertisement. An offer to pay refunds to dissatisfied customers does not dispel the effect of false advertisements.

The USPS established its false representation case by a preponderance of the reliable and probative evidence of record.Respondents are not engaged in conducting a lottery.

A False Representation Order and Cease and Desist Order was issued.

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