Thursday, May 25, 2006

You're a Winner!!! (Not Really)

If you have received the e-mails or telephone messages telling you that you've won a sweepstakes, or at least the highly valuable second prize, your heart probably jumps at least for a moment at the thought of riches.  For most of us, that's also about how long it takes to figure out that it's a scam, but the lure of free money sure was tempting to over 2,000 victims, as a recently completed Immigration and Customs Enforcement (ICE) investigation shows.  Defendants were arrested in a coordinated operation in the U.S. and Costa Rica for running a fraud that an ICE press release (here) described:

During their pitch to victims, the fraudsters in Costa Rica typically claimed to be a "U.S. Customs" official or a representative of another federal agency. They would then tell the victims that they had won 2nd prize in a foreign sweepstakes and that, to collect the prize money, the victims needed to send via Western Union anywhere from $1,000 to several thousand dollars to an "insurance entity" in Costa Rica as a "refundable insurance fee." Victims sent wire transfers to Costa Rica to claim the prizes, but never received any money.

Once the victim had wired the money to Costa Rica, the fraudsters would often call the victims back and inform them that they had actually won 1st prize and that they needed to wire thousands of additional dollars in fees in order to ensure the safe delivery of the prize money. The defendants and their co-conspirators continued to call victims with this pitch as long as the victims continued to wire money to Costa Rica. None of the victims ever received any prize money.

It is believed that more than 2,000 U.S. victims were defrauded out of at least $20 million through this international sweepstakes fraud.

Paying money to get your winnings sounds a bit counterintuitive, but then in hindsight that's true of most frauds.  If you're going to gamble, you might as well try investing in stock market, at least that is (marginally) more honest. (ph)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2006/05/youre_a_winner_.html

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