Cross-Border Law Enforcement Yields $1.5 Million in Redress for U.S. Consumers

Cross-border cooperation between Canadian and U.S. law enforcers will provide approximately $1.5 million in redress for victims of four international lottery scams operated by telemarketers based in Canada that targeted consumers in the United States. The FTC filed suits in the United States, and parallel enforcement actions and asset freezes were filed in British Columbia, Canada. The cases were pursued under Project Emptor, a cooperative arrangement coordinated by the Royal Canadian Mounted Police (RCMP) that teams Canadian and U.S. law enforcers, including the FTC’s Northwest Region, to target scams that emanate from Vancouver-area boiler rooms. Project Emptor participants include: the FTC, the Business Practices and Consumer Protection Authority of British Columbia, the RCMP's Vancouver Commercial Crime Section, the Federal Bureau of Inestigation (Los Angeles), the U.S. Attorney’s Office for the Central District of California, U.S. Postal Inspection Service, and Canada’s Competition Bureau.

In each of the cases, filed over the past four years, scam operators targeted elderly consumers in the U.S. in bogus lottery schemes. In one case, consumers were told they had won the Australian lottery, but to claim their winnings, they would have to pay certain fees – variously characterized as offshore account-processing fees, taxes, or other fees. In another case, telemarketers urged consumers to buy British bonds with guaranteed payouts, to be determined by a lottery process, of between $5,000 and $12,000. In a third case, telemarketers also sometimes claimed to be selling British bonds or lottery tickets, but consumers were told they first needed to pay a substantial amount of money before receiving any payout. In the fourth case, telemarketers claimed that consumers had won millions in an Australian or Spanish lottery or a “give-away” sponsored by the Spanish royal family, but to receive their “winnings,” consumers had to first send a fee.

The FTC alleged that none of the consumers received anything of value from any of the operations and that buying and selling foreign lottery tickets is illegal in the United States. It charged the operations with violating the FTC Act and the Telemarketing Sales Rule.

In addition to obtaining restitution for consumers, the four FTC actions and the parallel law enforcement actions in British Columbia resulted in orders barring the lottery scam operations.

Defendants in the cases included: D&C National Holdings, Ltd. (FTC File No. X020058); Dillon Sherif (FTC File No. X020018); NAGG Secured Investments (FTC File No. X010016); and Nanda Kumar Duraisami. (FTC File No. X030063).

Copies of the news releases detailing these cases 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 in English or Spanish (bilingual counselors are available to take complaints), 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.