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Fraudulent Telemarketer and Co-Conspirators Sentenced for Roles in Fake Sweepstakes Scheme

On September 22, 2009, four owners of Costa Rica-based telemarketing call centers, an employee, and a Texas-based list broker were sentenced for their roles in defrauding thousands of U.S. victims of more than $20 million through a phony sweepstakes scheme. The sentences, which ranged from 50 years to 41 months in prison, forfeitures and fines of more than $14 million, and millions of dollars in restitution, were handed down by U.S. District Court Judge Frank D. Whitney of the Western District of North Carolina. To date, 39 defendants have been convicted and well over $200 million in fines and restitution have been ordered.

According to court documents, callers falsely identifying themselves as employees of the “Sweepstakes Security Commission” told victims, most above the age of 55, that they had won huge cash prizes in a national lottery sanctioned by the U.S. Department of Commerce. Calls were made from Costa Rica using computers to make telephone calls through the Internet, disguising the originating location of the calls. The victims were instructed to use commercial wire transfer services to send payments of $1,500 to $4,500 to Costa Rica, purportedly for a “refundable insurance fee” that was required to retrieve their winnings. Many of those defrauded made multiple transfers to the telemarketers.

The case was prosecuted by the Criminal Division’s Fraud Section of the U.S. Department of Justice with the division’s Office of International Affairs providing assistance. Begun in 2003, this ongoing investigation is being conducted by the U.S. Department of Commerce, Office of the Inspector General; U.S. Postal Inspection Service; and U.S. Immigration and Customs Enforcement.

The U.S. Department of Justice press release about the sentencing is available here.