News

Swindled out of $750 last spring in a bogus foreign lottery, G.H. figured there was no chance he could be taken twice by the same scheme.

"I was devastated over that, but I learned my lesson," said the Mt. Pleasant Township man. "I'll never send my own money to get money."

Authorities say that scam victims often are the targets of other unscrupulous offers, so G.H. won't be identified here. But his story illustrates how a number of illicit schemes operate.

G.H. had wired the $750 to a man who promised to act as his agent in obtaining $815,950 he had purportedly won in Spain's El Gordo Lottery.

The winnings never materialized. G.H. later discovered the "agent" was really a con artist running a scam that fraudulently promises big lotto winnings in exchange for payment of advance "processing" fees.

His checking account still stinging from the loss, G.H. took comfort in the knowledge that, at the least, he wouldn't be victimized twice.

So when another man called him in December with the news he had won more than a half-million dollars in an Australian sweepstakes, G.H. took precautions.

He made certain he didn't have to pay any upfront, out-of-pocket fees. He waited for an "advance check" of $4,800 -- sent to him by the sweepstakes promoter to cover so-called processing fees -- to clear the bank before spending the cash.

But G.H. still came out a loser.

Shortly after he spent $219 to wire $4,400 in proceeds from the advance check to the sweepstake's promoter, the check bounced.

Instead of receiving another check in the mail for his promised $550,000 in winnings, G.H. got a letter from his bank: The bad check left his checking account $3,765 overdrawn.

Payment was due. Immediately.

There was some good news. G.H. had $1,000 in a savings account that he drew on to help cover the bad check.

The bad news? His bank already had drained and closed the savings account.

"That was the shock of my life," he said. "When I got the statement from the bank stating that the $4,800 check was returned, unpaid, and the bank sucked all the money out of my savings account, and I still owe them $3,700."

G.H. didn't contact law enforcement over his El Gordo losses, but he did file reports regarding the phony Australian sweepstakes with the Federal Trade Commission, the U.S. Postal Service and state police at Greensburg.

Brenda Mack, an FTC spokeswoman, said it is illegal for U.S. consumers to participate in foreign lotteries by mail or over the phone.

"First off, if you are playing a foreign lottery through the mail or over the phone, you are violating federal law," she said. "So if you see something like that, don't do it."

Any such offer, according to the commission, is likely a scam. Mack said a consumer's best bet is to ignore foreign lottery solicitations.

G.H. nonetheless said he remains optimistic he'll recover the money he lost in the Australian sweepstakes scam, but a postal service spokesman said that scenario is unlikely.

"It's not good," said Bruce Hammerle, spokesman with both the U.S. Postal Service in Pittsburgh and the multi-agency Financial Crimes Task Force. "A lot of times these things are out of the country. It's difficult enough to recover losses inside the country. When they have criminals who operate internationally, it's more difficult."

State police Trooper John Zalich, the investigating officer, could not be reached for comment.

It's also unlikely the bank will help.

Barbara Petito, deputy press secretary for the state Attorney General's Office, said counterfeit checks have reached such a level of sophistication that even banks are fooled.

"The consumer puts the check in the bank, they wait a week, and the bank clears it," Petito said. "The scam artist will even say, 'Wait until the check clears,' because the counterfeits are so good, the checks do clear."

By the time the bank discovers its error, Petito said, the consumer usually has already spent the cash or forwarded it to the con artist. Ultimately, she said, the consumer will be held liable because banks are not obligated to take the loss.

G.H. said the bank's demand for immediate payment has left him feeling like a criminal.

"They're still pressuring me, that this is considered a federal offense, and they will pursue any means necessary to get the money back," he said. "They're treating me as if I robbed the bank, when I'm just the victim."

G.H. said his Australian sweepstakes loss is just one in a series of recent financial moves that have pushed him to consider filing for bankruptcy.

In addition to the fraudulent lotteries, G.H. said he spent about $30,000 on the Tempe, Ariz.-based Millionaire Web Club. He said he used credit cards to pay the company fees of as much as $5,000 each to set up and manage purported revenue-generating Web sites.

G.H. said the company has sent him only one check, for $450 in commissions, since he signed up several months ago.

A man who identified himself on a prerecorded message as Peter Balatto, director of client relations for the club, did not return a phone call seeking comment.

According to the Better Business Bureau, the Millionaire Web Club has been in existence since July 2000. It charges consumers between $199 and $1,631 to set up Web sites. For additional fees ranging from $100 to $7,500, it claims to advertise the sites.

The company has an unsatisfactory record with the bureau. According to a bureau report, the club has yet to substantiate advertising claims that its members' Web sites turned profits of up to $25,000 monthly.

G.H. said he bought into the club's claims because he is unemployed and was seeking any means of establishing an income. The club's salesman, he said, was very convincing.

"He could sell snow water to an Eskimo," he said. "He made it sound so good, even when I was into them for $14,000."

G.H. said he believes his inquiries into the Millionaire Web Club and other "money-making opportunities" ultimately put his name and phone number in the hands of the sweepstakes con artists.

"Once you start looking, you start getting on everybody's mailing list," he said. "Whether it's a scam or legitimate."

Scam tips

Credit Federal Trade Commission, Pennsylvania Attorney General's Office and United States Postal Service.

-- If you play a foreign lottery, you're violating federal law.

-- If you purchase one foreign lottery ticket, expect many more bogus offers for lottery or "investment" opportunities. Your name will be placed on "sucker lists" that fraudulent telemarketers buy and sell.

-- Never send money to "insure" your prize. Upfront fees are illegal.

-- Never give out bank account, credit card or Social Security numbers to "verify eligibility," especially if you did not initiate the call.

-- Be skeptical of anything that sounds too good to be true.

• Most Read
• Most E-mailed
• Latest News