INTERNATIONAL TASK FORCE WARNS CONSUMERS NOT TO FALL FOR CROSS BORDER LOTTERY AND ADVANCE-FEE SCAMS; VICTIMS SPEAK-OUT

The FBI, in partnership with the Royal Canadian Mounted Police, has teamed up to address the growing crime problem of cross border fraud by teaching consumers how to recognize and avoid becoming victimized by telemarketers, spam e-mailers or misleading advertisers. These schemes involve phony prize promotions, foreign lottery schemes, advance-fee loan rip-offs, credit card protection scams, bond schemes and others. The federal government estimates these types of fraud schemes to cost consumers billions of dollars per year in the U.S. and elsewhere.

In recent years, law enforcement investigating cross border fraud has identified the following trends:

Fraudulent telemarketers obtain numerous wire transfer payments by convincing victims to send money to countries all over the world.

Counterfeit checks are mailed to U.S. citizens with instructions that they should deposit the check into their bank account. According to the fraudulent solicitors, the amount of the check is being sent to assist in paying fees or taxes on the lottery winnings. The checks appear, on the surface, to be authentic. In some cases, it may take the bank several days to determine that the check is fraudulent.

J. Stephen Tidwell, Assistant Director in Charge of the FBI in Los Angeles stated, "The ease in which scam artists have operated from Canada and abroad has victimized too many unsuspecting U.S. citizens. Law enforcement is addressing this insidious crime through prevention and thorough investigation, in order to fix the growing problem of cross border fraud. The Canadian/U.S. border should not be considered an invisible shield by which fraud is committed, since both countries have committed to protecting their citizens."

The Project Emptor Task Force in British Columbia focuses on cross border scams including lottery sweepstakes scams, bond scams and credit card protection scams. Agencies in Canada and the U.S. include the following:

FBI
United States Attorney's Office
Royal Canadian Mounted Police
United States Postal Inspection Service
Federal Trade Commission
Canadian Border Services Agency
Canadian Competition Bureau
British Columbia Consumer Protection Authority

In recent years, the task force has successfully investigated these matters resulting in forty indictments, thirty two arrests and twenty convictions on charges ranging from wire fraud, mail fraud, mailing materials related to lotteries and telemarketing fraud against the elderly. The arrests have taken place in British Columbia, Alberta, Montreal, Nigeria and the United States. One subject arrested in Nigeria was extradited from Lagos. In addition, the task force works with Canadian civil investigators and Canadian law enforcement utilizing Canadian law to seize telemarketers' assets, including bank accounts, property and luxury vehicles. The Federal Trade Commission works with the Project Emptor Task Force to return to victims the funds seized in Canada and the United States.

"As a result of our vigilant efforts over the past 15 years, we have driven some unscrupulous telemarketers into Canada, where they think they can evade law enforcement," said Debra Wong Yang, United States Attorney in Los Angeles. "But through the cooperative efforts of United States law enforcement, and Canadian authorities, we have apprehended and prosecuted nearly fifty individuals who have preyed on Americans."

"The Royal Canadian Mounted Police in British Columbia recognized the severity of this problem when it formed the Project Emptor task force in 1998," said RCMP Superintendent Gordon McRae, head of the British Columbia's Commercial Crime Section. "Working with our partners in the United States we've developed an effective strategy that uses both criminal and civil processes to target offenders, seize their properties and other assets such as vehicles and boats—no matter where in the world these assets are—and return money to their victims. Financial crimes may not leave a chalk line on the pavement, but they can destroy someone's life, and the Royal Canadian Mounted Police take this type of offense very seriously."

"The U.S. Postal Inspection Service is committed to working with the FBI and Royal Canadian Mounted Police (RCMP), our law enforcement partners in the fight against cross-border fraud," said acting Inspector in Charge William Atkins, "to protect this nation's citizens from fraudsters operating in foreign countries."

The following Los Angeles victims are representative of the type of cross-border fraud schemes being perpetrated against United States citizens, many of whom are elderly, and attended a press conference to assist law enforcement in its public awareness campaign by telling their stories:

Royal Barnett from La Puente, California, sent $499.00 in response to a Lottery Sweepstakes scam to a Vancouver company, TMS, in 2003. The owner of the company, George Condie, was charged in Los Angeles and arrested in Detroit. Condie was sentenced in October 2005 and is currently serving a 46-month prison sentence.

George Demaree of Granada Hills, California, sent approximately $200,000 in relation to a cross border scam, including a $175,000 wire transfer to Cambodia. In February 2006, Demaree was told he won $13 million from a sweepstakes for which he had to pay taxes in order to receive.

Betty Divall of Los Angeles, California, has been victimized in two cross-border schemes. She began receiving numerous mail solicitations in early 2000 from various foreign lotteries, including Canadian and Australian. Divall sent several hundred thousand dollars to Montreal, British Columbia and the Middle East from 2000 - 2001, in an attempt to obtain lottery winnings for which she would be required to pay taxes, according to the instructions provided to her during the fraudulent scheme. Three individuals who had been residing in Montreal and Vancouver, British Columbia, were arrested based on the task force investigation.

The Project Emptor Task Force recommends the following tips to U.S. citizens who may be targeted for cross-border fraud or advance-fee fraud solicitations.

Be suspicious of any offer that sounds too good to be true.
Fraudulent telemarketers may misrepresent themselves as government officials, law enforcement officers, banking representatives and attorneys, in order to convince a potential victim to send money. In addition, they may also attempt to send documents falsely representing their company or governmental agency.
If you have legitimately won a lottery or sweepstakes prize, you will never have to pay money in advance of receiving your winnings.
Hang up on anyone who solicits your money in advance of awarding a prize.
Never provide personal information over the telephone including your date of birth, social security account number, credit card or bank account information.
Do not attempt to deposit checks sent by companies whose representatives claim the check is being sent to pay fees or taxes on lottery winnings. These checks may appear to be legitimate but they are not. Some of the checks may even be drawn on legitimate accounts and may include actual routing numbers so that they appear to be authentic even when presented for deposit at a bank.
Fraudulent telemarketers will apply high pressure sales techniques by falsely representing that the fees are required immediately in order to obtain the winnings.
Report cross-border or advance-fee scams over the Internet or over the phone to the following:
a. FBI's Internet Crime Complaint Center: www.ic3.gov
b. Phonebusters: (888) 495-8501
c. Federal Trade Commission: (877) 382-4357
Visit the following websites for more information and helpful tips:
www.fbi.gov
www.ftc.gov/crossborder