FTC Halts Operation that Posed as Government Agencies and Duped Consumers into Paying to Collect Bogus Prize Money

At the Federal Trade Commission’s request, a federal judge has halted an operation that allegedly tricked people into paying a $20 fee to collect a fake multi-million-dollar sweepstakes prize. The case is part of an ongoing FTC crackdown on scams that target financially strapped Americans, and the agency is seeking to make the defendants give up their ill-gotten gains.

According to the FTC’s complaint, operators of the scam sent personalized mailers, some with fictitious government agency names and official-looking seals, to hundreds of thousands of consumers. The mailers included statements such as:

“Your identification as recipient for reported cash award entitlements totalling over $2,500,000.00 has been confirmed! We are so pleased at having the honor of informing you of this wonderful news.”

Some of the mailers prominently touted that they were affiliated with a government agency, such as the “State of Illinois Commissioners of Regulation” and “OFFICE OF THE PRESIDENT OFFICIAL NOTIFICATION,” along with language, symbols, and artwork such as “In God We Trust” and a bald eagle.

The mailers stated that, in order to collect the prize, the consumer had to send a $20 “processing fee” by a certain deadline. Instead of receiving a prize, however, some consumers received information about entering sweepstakes. The mailers contained fine-print language stating vaguely that the operation was a reporting service that provided information on various sweepstakes, but they did not clearly inform consumers that they had not won any prize.

The defendants operate through a network of companies and use multiple business names and dozens of versions of their mailers. The defendants are National Awards Service Advisory LLC, Central Processing of Nevada LLC, International Award Advisors Inc., Spectrum Caging Service Inc., Prize Registry Bureau Inc., Consolidated Data Bureau Inc., Registered Data Analytics Inc., Lloyd Brannigan Exchange Inc., Geovanni Sorino, Jorge A. Castro, Tully A. Lovisa, and Steven McClenahan.

Under the judge’s order, the operation has been halted pending a hearing.

The Commission vote to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Northern District of California. The order was entered on December 1, 2010.

Legitimate sweepstakes don’t require you to pay or buy something to enter or improve your chances of winning, or to pay “taxes” or “shipping and handling charges” to get your prize. If you have to pay to receive your “prize,” it’s not a prize at all. Click here for information about prize offers.

NOTE: The Commission authorizes the filing of 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 defendants have actually violated the law.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.