Reno Gazette: Foreign lottery scams targeting Nevadans

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Foreign lottery scams targeting Nevadans. Fake checks used to confuse victims; police say they get about 20 reports a month

JACLYN O'MALLEY
RENO GAZETTE-JOURNAL
Posted: 2/19/2006

Report any foreign lottery phone call or mailing to the Federal Trade Commission at (877) 382-4357 or online at www.ftc.gov or via e-mail at uce@ftc.gov.

Fraud-Aid.com and Fraud Watch International has a database of known lotto scam companies that can be viewed on its Web sites at www.fraudaid.com and www.fraudwatchinternational.com.

How the Scam Works

A consumer typically receives a telephone call, mailing, or e-mail indicating that he/she has won a prize in a foreign lottery or contest. Or the caller might say a foreign government is distributing money to American consumers who may have been harmed by illegal telemarketing activities by Canadian firms.

They all request you send money to receive your prize. You are asked to send money to cover fees for processing, legal operations, foreign customs or taxes.

They may ask you to send a personal check, money order, wire transfer or to disclose personal banking information or credit card number.
Source: FTC

Congratulations!

It's your lucky day: You just won a foreign lottery or a sweepstakes you never entered.

Every day thousands of Americans, including Washoe County residents, are mailed a hefty check and a notice guaranteeing they won thousands of dollars in a foreign lottery.

While the check might look real, and some banks might even deposit it into your account, authorities say it's a scam. After all, how can you win a contest you did not enter?

With the recent inclusion of fake checks in these mailings, the Federal Trade Commission says these lotteries continue to be a top fraud in the U.S. every year. Consumers lured by prospects of instant wealth respond to these mailings by sending bogus companies a total of $120 million a year, according to the U.S. Postal Service.

"The elderly or people on a fixed income, especially, want so badly for it to be true," said Sgt. Chuck Lovitt, who heads the Reno Police Department's Financial Crimes Unit. "Once they're hooked, they give these crooks money and personal identification information.

"If you have a check in your hand and are holding it, that is the perfect hook," Lovitt said. "Their name is on it with a bunch of zeroes...they get excited."

The FTC said that in 2004, there were 2.4 million reports of Americans receiving notices or calls that they won prize money, and 1.8 million of those people sent money and never received their winnings. Foreign organized crime rings usually are behind these scams, authorities said.

Lovitt said he gets about 20 reports of foreign lotteries a month in Reno.

"You have to employ common sense," Lovitt said. "If you did not enter a lottery, how can you win? And if you won a bunch of money, why wouldn't they just tax your winnings? Why would you have to send anyone any money?"

Anthony Williams of Sparks received a notice last month in the mail from "Publisher Digest Lotto Sweapstake (sic) Inc" that said he won $35,000 in prize money. It said his name was selected through a computer ballot system drawn from "readers digest publishers clearing house."

Enclosed was a check for $995. He was encouraged in the letter to cash it immediately and send it to the processing office in the Virgin Islands. The money was to be used for taxes and processing fees. A phone number given for his "agent" led to a voice mail message that could not be understood.

"I looked at the check and thought 'wow, this looks real,'" Williams said. "When it said it must be cashed immediately, it made me really suspicious."

So Williams called Gulf Federal Bank in Alabama and confirmed with a bank official the check was fake.

"I could have used that money," he said.

The scam occurs when people send money under the guise it is for taxes or handling fees. Sometimes, personal information is asked for and then used for identity-theft purposes, Lovitt said.

"It's getting worse now that they are sending checks," said Steve Baker, Midwest region FTC director. "People think well, I've got my check for $25 million, and it's in the bank, what could be wrong?

"People want to believe," he said. "They call and say you won, can we bring a camera crew...but, if someone wants money for any reason, they are crooks."

Baker said another version of the scam is when crooks call and ask consumers to buy chances in foreign lotteries. That's illegal, he said.

Unfortunately, fewer than 8 percent of victims report they were scammed, Baker said of survey results.

"We need people to report this," he said.

Baker added sometimes it can be hard to verify whether these foreign companies are legitimate. He said that consumer education is the best prevention because it's nearly impossible to get anyone's money back after it is wired overseas.

"Millions of people have sent money thinking they won these lottos," Baker said. "It's not just the dense person in the next town falling for it. Anyone can be a victim. These scams are out there big time and are incredibly effective."

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