Older Adults Targeted by Lottery and Sweepstakes Scams

The California retiree says she was crushed when the other person on the call told her to send about $30,000 to cover the taxes so her “package,” as the prize was described, could be delivered.

"No way,” she replied. But when the amount was reduced to $10,000, it seemed like a small price to pay, she says. The woman got a cashier's check for that amount and, as directed, mailed it to a woman in Massachusetts.

Even now, calls for more cash keep coming. After sending the first $10,000, she sent roughly $6,000 more using cashier's checks and three Vanilla cards. “They call me all the time, sometimes as early as 5 a.m.,” says the retired teacher, who blames a bleeding ulcer on the stress she's endured just as she copes with a husband who's “really upset” that she parted with the money.

Call to AARP fraud helpline

After she was ripped off, she alerted AARP's Fraud Watch Network helpline, 1-877-908-3360. The free, toll-free service is staffed by trained volunteers who often hear about sweepstakes and lottery scams.

Two crime rings, millions in losses

In just-announced criminal cases, the losses from such scams from two crime rings alone climbed into the tens of millions of dollars, the Department of Justice (DOJ) said on Sept. 1, noting thousands of elderly and vulnerable victims had been defrauded.

DOJ officials urge victims of financial fraud who are 60 or older to call its National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). If you are a victim of a crime, be sure to contact your local law enforcement agency, too.

Scams involving prizes, sweepstakes and lotteries have long been among the top five frauds reported annually to the Federal Trade Commission (FTC), a consumer protection agency. There were 769,116 such complaints during the five-and-a-half-year period ending June 30, with losses reaching $597 million, the FTC says.

More than money is lost

Adults age 65 and older remain overwhelmingly the largest group victimized by these scams, says a national study by the Better Business Bureau (BBB). And victims lose more than money as some are “emotionally devastated” when they realize they have been swindled, the BBB says. “Some have even resorted to committing suicide."

The criminal cases announced by the DOJ involve four men, from two separate rings, and all of the defendants earlier were slapped with civil sanctions for mass-mail fraud.

Sean Novis, 50, and Gary Denkberg, 57, both of Long Island, New York, were indicted in federal court in New York.

The others, Canadians Alex Quaglia and Patrick Fraser, were indicted federally in Nevada. The indictment alleges these two ran a mass-mail operation out of Vancouver, British Columbia, and rented mailboxes at UPS stores and other private stores that rent mailboxes in the U.S. and around the world as they promised people large cash prizes for fees of $19.95 to $39.95. The fake notifications included a pre-addressed envelope to send the fee by cash, check, money order or credit card number, the indictment says, but victims who paid up “did not receive the cash prize."

Going to lengths to avoid detection

Donna Harris is with the U.S. Postal Inspection Service, which probes sweepstakes fraud involving the mail.

United States Postail Inspection Service

Quaglia is accused of using an “elaborate and elusive system” to get his hand on the cash, the indictment says. Victims sent payments to U.S. locations including Las Vegas, Nevada; these were forwarded to Cheyenne, Wyoming, and later, to Buffalo, New York. A Buffalo firm trucked the mail to suburban Toronto, Ontario, and later the payments were shipped to Vancouver.

The two rings were probed by the U.S. Postal Inspection Service (USPIS), the law enforcement arm of the U.S. Postal Service. A USPIS spokesperson in New York City, Donna Harris, told AARP: “We wanted to make certain that no matter what and no matter how long it took, we would make certain that they would be held accountable and brought to justice for their crimes.