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FTC Obtains Court Order Against Fake Prize Scheme Operation

By on December 21, 2017

The Federal Trade Commission has closed the book on a scheme that tricked people into paying $25 to collect a $1 million prize they supposedly had won. Those who paid got nothing.

After weighing written arguments from the FTC and the defendants, a federal court issued a default judgment resolving FTC charges brought in September 2016, alleging that David Raff, Millenium Direct Incorporated, Ian Gamberg and Terry Somenzi mailed fake prize notifications to 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!”

In addition to sending many apparently unrelated prize mailings, the defendants sold consumers’ personal information to other schemes, causing many people to receive numerous deceptive cash prize notifications and other offers. Many consumers paid substantial sums of money in response to repeated mailings promising prizes.

Under the order announced today, Raff and Millenium Direct are required to pay $501,895, and they are 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.

The case is part of an international law enforcement initiative against mass-mail fraud. At the FTC’s request, the U.S. District Court for the Central District of California entered the default judgment against Raff and Millenium Direct on July 24, 2017.

This article by the FTC was distributed by the Personal Finance Syndication Network.

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