Three U.S. citizens were sentenced to prison today for their roles in sweepstakes fraud schemes to defraud hundreds of U.S. residents, many of them elderly, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.
Jeffrey Robert Bonner, 41, of Sacramento, California; and Frank M. Schiavone, 76, and Lewis E. Ricker, 65, both of Lutz, Florida, were sentenced by U.S. District Judge Robert J. Conrad Jr. of the Western District of North Carolina to 180 months, 48 and 42 months in prison, respectively. Judge Conrad also ordered Bonner to pay $9,688,486.47 in restitution and to forfeit the same amount, and ordered Schiavone and Ricker to each pay $399,852.56 in restitution. Bonner, Schiavone and Ricker pleaded guilty to various counts of conspiracy to commit wire and mail fraud, wire fraud, conspiracy to commit money laundering and international money laundering, all in connection with separate Costa Rican telemarketing fraud schemes.
As part of his guilty plea, Bonner admitted that from approximately 2007 through February 2015, he owned a call center located in Costa Rica that placed phone calls to U.S. residents and falsely informed the potential victims that they had won a substantial cash prize in a “sweepstakes.” Schiavone and Ricker admitted that they worked for a different call center from approximately 2009 to 2015 that operated a nearly identical scheme. The victims, many of whom were elderly, were told that in order to receive the prize, they had to pay for a purported “refundable insurance fee.” Once they received victims’ money, Bonner, Schiavone, Ricker and other co-conspirators in their respective schemes contacted the victims again to tell them that their prize amount had increased and told the victims to pay new purported fees, duties and insurance to receive the larger sweepstakes prize. The defendants and their co-conspirators continued their attempts to collect additional money from victims until those victims either ran out of money or discovered the fraudulent nature of the scheme.
Schiavone and Ricker collected victim money sent to them in the United States and then routed the money to their co-conspirators in Costa Rica.
Bonner admitted that to mask that the fact he and his co-conspirators were calling from Costa Rica, they utilized voice over internet protocol (VoIP) phones that displayed a 202 area code to give the false impression that they were calling from Washington, D.C. Bonner and his co-conspirators often falsely claimed that they were calling on behalf of a U.S. federal agency to lure victims into a false sense of security. The victim loss associated with Bonner’s scheme is nearly $10 million.
The U.S. Postal Inspection Service, FBI, Internal Revenue Service-Criminal Investigation, Federal Trade Commission and Department of Homeland Security investigated the cases. Trial Attorneys Gustav Eyler and William Bowne of the Criminal Division’s Fraud Section are prosecuting the cases.
The Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country. Today’s sentencing is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.