The Federal Trade Commission has filed suit in U.S. District Court to shut down the operation of a cross-border con artist who targeted elderly U.S. citizens in a bogus foreign lottery scheme. The agency will seek a permanent ban on the operator’s deceptive and illegal practices and redress for consumers. The British Columbia Ministry of Public Safety and Solicitor General has initiated a parallel enforcement action and asset freeze in the Province of British Columbia, Canada. The case was pursued under Project Emptor, a cooperative arrangement coordinated by the Royal Canadian Mounted Police that teams Canadian and U.S. law enforcers, including the FTC's Northwest Region, to target scams that emerge from Vancouver-area boiler rooms.
In papers filed in federal district court in Seattle, the FTC alleged that the defendant, operating out of Vancouver, British Columbia, targeted elderly citizens in the United States. The defendant and his telemarketers allegedly phoned consumers to tell them that they had won the Australian lottery, but that to claim their winnings, they would have to pay certain fees – variously characterized as offshore account processing fees, taxes, or other fees. The sale and trafficking in foreign lotteries is a crime in the United States, a fact that the telemarketers did not disclose to consumers. According to the FTC, consumers who sent money received nothing. The FTC alleged that the defendant’s claims that the consumer had won the lottery were false and violated the FTC Act and the Telemarketing Sales Rule (TSR). The FTC has asked the court to permanently bar the defendant from violating the FTC Act and TSR and to order consumer redress.
The FTC complaint names Nanda Kumar Duraisami, also known as Nanda Kumar and D.N. Kumar, doing business as Best American Investment Service; Bellfield Rose International Corporation; BIC; and Melbourne International Bank. The FTC alleged that Duraisami and his telemarketers solicited cashier’s checks and bank drafts made payable to these entities for thousands – sometimes tens of thousands – of dollars, claiming that these payments would secure winnings of several million dollars for each consumer. Duraisami and his telemarketers, who used aliases to make these calls, also directed some consumers to make checks payable to “International Banking Services,” according to the FTC. Consumers mailed these checks to addresses in British Columbia. The FTC alleged that consumers’ payments were deposited into Costa Rican accounts that Duraisami controlled.
Earlier this year, the Federal Trade Commission launched a new Web site, www.ftc.gov/crossborder, to help consumers spot, stop, and avoid cross-border fraud. It contains information on recent FTC law enforcement actions against cross-border scam artists, as well as FTC coordination with law enforcement agencies in other countries to combat this multi-billion dollar problem. In addition, the North American Association of State and Provincial Lotteries (NASPL) (www.naspl.org) and several of its state lottery members have provided links to this FTC Web site from the home pages of their Web sites. Some of these participating state lottery web sites include Arizona, California, Delaware, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Nebraska, New Jersey, New Mexico, Ohio, Pennsylvania, South Dakota, Vermont, Washington, and Wisconsin. The FTC thanks NASPL and its participating members for this assistance in educating consumers about illegal foreign lotteries.
The Commission vote to authorize staff to file the complaint was 5-0. It was filed in the U.S. District Court for the Western District of Washington at Seattle.
NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.
Copies of the complaint are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1 877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.