Scam That Targeted Elderly Consumers with Fake Prize Notices Permanently Shut Down
The defendants tricked people into paying $25 to collect a nonexistent $1 million prize
The Federal Trade Commission (FTC) has closed the book on a scheme that tricked people into paying $25 to collect a $1 million prize that they had supposedly won. In reality, the million-dollar prize didn't exist.
Those who paid the money got nothing in return.
False Promises of 'Cash Prize'
After weighing written arguments from the FTC and the defendants, a federal court issued a default judgment this week resolving FTC charges brought in September 2016.
The FTC alleged that defendants David Raff, Millenium Direct Incorporated, Ian Gamberg, and Terry Somenzi mailed fake prize notifications to hundreds of thousands mostly elderly consumers that stated, after the recipient's name, " . . . this is NOT a preliminary or qualification letter of cash prize status; YOU HAVE WON A CASH PRIZE!"
Sold consumer info to other scammers
In addition to sending many apparently unrelated prize mailings, the defendants sold consumers' personal information to the operators of other similar scams, causing many people to receive numerous deceptive cash prize notifications and other offers.
Many consumers paid multiple fees amounting to substantial sums of money in response to repeated mailings promising prizes.
Banned from business
Under the court order, Raff and Millenium Direct are required to pay $501,895. They are also banned from the prize promotion business and from misrepresenting any good or service. Gamberg was banned from misrepresenting any good or service under a settlement reached in February 2017. The case against Somenzi was dropped after he passed away last year.
This case is part of an international law enforcement initiative against mass-mail fraud. Find out more about this initiative.