Seattle -February 7, 2001- Operators of a cross-border lottery scam that targeted elderly Americans have agreed to pay more than $334,000 to settle a complaint filed by the Federal Trade Commission and the attorneys general of Washington and Arizona.
The operators of Canadian companies Win USA Services Ltd., IRAL Services Inc. and IRAL Enterprises Inc. bilked U.S. consumers out of more than $2.1 million by selling tickets in foreign lotteries while misrepresenting the odds of winning.
In some cases, victims were told they had already won and just needed to pay a "processing fee" in order to collect a multi-million dollar prize. Other victims were assured of having a one-in-six chance of winning a $10 million Australian lottery if they bought tickets through Win USA.
Consumers sent hundreds and sometimes thousands of dollars to the Canadian companies.
In addition to lying about the true odds of winning, Win USA neglected to tell victims that it is illegal to buy or sell foreign lottery tickets in the United States.
"Some Washington senior citizens sent thousands of dollars to these con artists," Attorney General Christine Gregoire said. "People need to be vigilant about avoiding these
'beat the system and get rich quick' schemes. The only people getting rich are doing it the expense of consumers."
In 1998, the attorneys general of Washington and Arizona joined with the Federal Trade Commission to file a complaint against the companies and their owners. The British Columbia Ministry of Attorney General filed a similar complaint and took control of all company assets.
Last April, U.S. District Court Judge Thomas Zilly ordered the companies to stop selling lottery tickets and to repay more than $3,178,000 (Canadian) to the defrauded consumers. But the defendants did not have sufficient assets to make the restitution.
In the settlement filed Monday, the FTC--along with Washington and Arizona--agreed to accept $500,000 in Canadian funds as full payment. That amount, which equals about $334,000 in U.S. funds, represents all of the defendants' assets now held by the British Columbia government.
The funds will be returned as redress to defrauded U. S. consumers after the Canadian authorities have recouped their legal costs.