Scammers Posed as Government Agencies and Duped Consumers into Paying for Bogus Prizes
The Federal Trade Commission put a stop to an operation that allegedly conned hundreds of thousands of consumers into paying $20 apiece by posing as government agencies and luring them with fake sweepstakes prizes. Under settlements reached as part of the FTC's ongoing crackdown on schemes that prey on financially strapped consumers, the defendants are banned from the prize promotion business.
According to the FTC's amended complaint, operators of the scheme sent consumers personalized mailers, some with fictitious government agency names and official-looking seals, with misleading statements such as, "Your identification as recipient for reported cash award entitlements totaling over $2,500,000.00 has been confirmed!" What the mailers did not tell consumers is that they had not actually won any prize. The defendants operated through a network of companies, used multiple business names, and sent dozens of versions of their mailers, according to the FTC's complaint.
The settlement order against Tully Lovisa and his two companies, International Award Advisors Inc. and Spectrum Caging Service Inc., imposes a judgment of almost $15.5 million. It also imposes a $170,000 judgment against his wife, Lisa Lovisa, a relief defendant who allegedly profited from the scam. The judgment against Tully Lovisa and his companies will be suspended when they have given up nearly $196,000 held by third parties, proceeds from the sale of the Lovisas' Las Vegas home and other personal property, more than $6,000 in cash, and a 2007 BMW.
The settlement order against Steven McClenahan and his four companies, Prize Registry Bureau Inc., Consolidated Data Bureau Inc., Registered Data Analytics Inc., and Lloyd Brannigan Exchange Inc., imposes a judgment of almost $15.5 million, which will be suspended when McClenahan has surrendered more than $97,000 in corporate bank accounts and paid $7,800.
The settlement order against Geovanni Sorino, Jorge A. Castro, and two companies they control, National Awards Service Advisory LLC and Central Processing of Nevada LLC, imposes a judgment of more than $5.5 million, which will be suspended.
In addition to banning the defendants from the prize promotion business, the settlement orders also permanently prohibit the defendants from making misrepresentations about any product or service, and bar them from selling or otherwise benefitting from customers' personal information, and require them to properly dispose of customers' personal information within 30 days. Under each order, the full judgments will become due immediately if the defendants are found to have misrepresented their financial condition.
The Commission vote approving the proposed consent order against Tully Lovisa, International Award Advisors Inc., Spectrum Caging Service Inc., and Lisa Lovisa, and the consent order against Steven McClenahan, Prize Registry Bureau Inc., Consolidated Data Bureau Inc., Registered Data Analytics Inc., and Lloyd Brannigan Exchange Inc., was 4-0-1, with Commissioner Ohlhausen not participating. The Commission vote approving the proposed consent order against National Awards Service Advisory LLC, Central Processing of Nevada LLC, Geovanni Sorino, and Jorge A. Castro was 2-1-2, with Commissioner Rosch voting in the negative, and Commissioners Ramirez and Ohlhausen not participating. The orders were entered by the U.S. District Court for the Northern District of California.
Legitimate sweepstakes don't require you to pay or buy something to enter or improve your chances of winning, or to pre-pay "taxes" or "shipping and handling charges" to get your prize. FTC consumer information reminds consumers that if you have to pay to receive your "prize," it's not a prize at all. For more information read Prize Offers: You Don't Have to Pay to Play, Putting a Lid on International Scams: 10 Tips for Being a Canny Consumer, and Scammers Exploit the FTC's Good Name, Promise Phony Sweepstakes Prizes.
NOTE: These consent orders are for settlement purposes only and do not constitute an admission by the defendants that the law has been violated. Consent orders have the force of law when approved and signed by the District Court judge.
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 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC's website provides free information on a variety of consumer topics. Like the FTC on Facebook and follow us on Twitter.
(Prize Information Bureau settlements)
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