The Federal Trade Commission has filed suit in U.S. District Court to shut down a cross-border scam that targets elderly U.S. citizens in a bogus foreign lottery scheme.
The scam operator and his telemarketers allegedly phoned consumers to tell them that they had won the Australian lottery, but that to claim their winnings, they would have to pay certain fees variously characterized as offshore account processing fees, taxes, or other fees.
The FTC complaint names Nanda Kumar Duraisami, also known as Nanda Kumar and D.N. Kumar, doing business as Best American Investment Service; Bellfield Rose International Corporation; BIC; and Melbourne International Bank.
The agency will seek a permanent ban on the operators deceptive and illegal practices and redress for consumers. The British Columbia Ministry of Public Safety and Solicitor General has initiated a parallel enforcement action and asset freeze in the Province of British Columbia, Canada.
The sale and trafficking in foreign lotteries is a crime in the United States, a fact that the telemarketers did not disclose to consumers. According to the FTC, consumers who sent money received nothing.
The FTC alleged that Duraisami and his telemarketers solicited cashiers checks and bank drafts made payable to these entities for thousands sometimes tens of thousands of dollars, claiming that these payments would secure winnings of several million dollars for each consumer.
Duraisami and his telemarketers, who used aliases to make these calls, also directed some consumers to make checks payable to International Banking Services, according to the FTC. Consumers mailed these checks to addresses in British Columbia. The FTC alleged that consumers payments were deposited into Costa Rican accounts that Duraisami controlled.
Earlier this year, the Federal Trade Commission launched a new Web site, www.ftc.gov/crossborder, to help consumers spot, stop, and avoid cross-border fraud. It contains information on recent FTC law enforcement actions against cross-border scam artists, as well as FTC coordination with law enforcement agencies in other countries to combat this multi-billion dollar problem.