A federal court has halted a massive sweepstakes scam that has taken more than $11 million from consumers throughout the U.S. and dozens of other countries - including Canada, the United Kingdom, France and Japan.
Liam O. Moran, a resident of Ventura, Calif., and his companies, mass mail personalized letters to millions of consumers, according to a Federal Trade Commission complaint, telling them that they have won a large cash prize - typically more than $2 million with bold, large-type statements such as Over TWO MILLION DOLLARS in sweepstakes has been reserved for you.
Consumers are told that they can collect the prize by sending in a small fee of approximately $20 to $30. The letters often indicate that recipients are guaranteed to receive the prize money if they pay the fee, and they create a sense of urgency by stating that it is a limited-time offer.
In dense, confusing language, often on the back of the letters, there are statements in direct conflict with the bold claims of major winnings. A careful reader might learn that they in fact have not won, and that the defendants do not sponsor sweepstakes but instead claim only to provide consumers with a list of available sweepstakes.
Consumers frequently fail to see or understand this language and send money to the defendants. The FTC alleges that this language does not appear designed to correct deceptive statements, but exists mainly as an attempt to provide a defense to law enforcement action. Consumers get nothing of value in exchange for their payment.
The defendants have sent more than 3.7 million letters during the past two years, including nearly 800,000 letters to people in 156 countries in the first half of 2013. They have collected more than $11 million from consumers since 2009. The vast majority of the victims of this scam appear to be over 65.
The court order temporarily stops the illegal conduct, freezes the operations assets and appoints a receiver over the corporate defendants while the FTC moves forward with the case.
Morans co-defendants are Applied Marketing Sciences LLC; Standard Registration Corporation, also doing business as Consolidated Research Authority and CRA; and Worldwide Information Systems Incorporated, also doing business as Specific Monitoring Service, SMS, Specific Reporting Service, SRS, Universal Information Services, UIS, Compendium Sampler Services and CSS.