Jamaica Sweepstakes Fraud Targets Older Americans

Older Americans are being clobbered by prize and sweepstakes schemes, with the majority of this sweepstakes fraud coming from Jamaica. These are mainly telemarketing schemes.

In a typical call, the scammer will pretend to be with Publishers Clearing House or the Mega Millions lottery, telling victims that they have won several million dollars — but warning them to keep it a secret.

The “winners” are also promised a free new car, usually a Mercedes, which will be delivered later in the afternoon. They are often even asked what color automobile they want. This is, of course, in addition to the money, which the fraudsters promise will be delivered the next day.

While the victims are contemplating the great things they could do for their friends, families and communities, the callers also note that money must be sent in advance to cover taxes owed to the IRS, insurance or some other made up reason. If victims do send the money, there are inevitably requests for additional cash.

No one ever receives any winnings. If it is possible to make matters worse, the fraudsters are also using the information they gather to divert the victim’s Social Security and VA benefits to themselves. Calls will usually continue until the victim has no more money and has borrowed all he or she can.

It is clear that those conducting this fraud are targeting older people: 60,000 victims reported losing over $38 million to Jamaica scams in just 2015. About half of the victims were over 70.

Not only does this devastate the lives of victims, those who refuse to — or can’t — send more money are sometimes subject to death threats.

The case of Sanjay Williams provides a good illustration of how this fraud works.

Williams, a Jamaican, seems to have begun his career making telephone calls to older people in the U.S. Federal authorities allege that he had over 80 victims, with total victim losses of more than $5.5 million.

Williams told his prospective older adult victims that to get their prize winnings they needed to pay fees for taxes, insurance or other reasons. Some victims lost only $300. At least one lost $850,000. Williams also used threats of violence against victims and their families to extort more money. He told one that he would kill the victim's sons and rape the victim's daughters. Another committed suicide.

At some point, Williams decided to get into the lead-list business, selling contact information of potential victims to other Jamaican fraudsters. Williams was buying these in the U.S. for as much as $5.50 per name and sold them to his co-conspirators and some 400 other fraudsters in Jamaica.

He was arrested when he visited the U.S. to obtain leads, and was prosecuted by the U.S. Attorney’s office in the District of North Dakota. After trial ,Williams was convicted by a jury. In November 2015, he was sentenced to 20 years in federal prison and ordered to pay $5.6 million in restitution to victims. I testified at the sentencing hearing on behalf of the Federal Trade Commission (FTC).

Many of us conclude that this kind of scam could never happen to us. We believe that using our native caution we would be able to quickly detect that these are frauds. But in my experience, most fraud victims are perfectly normal people. Their tools for detecting deception simply don’t work against the frauds. Here are a few reasons why this is true:

The crooks are professionals. These frauds are carefully constructed by pros with scripted answers for any question you pose. They also tell people they must act immediately or the award will be given to someone else. You may be able to detect that your friends or family are fibbing to you, but you won’t be able to detect it from talking to the crooks over the telephone.

They are telling you something you want to believe. Millions of people buy lottery tickets and enter sweepstakes; of course, at times, someone does win those. With these scams, people like to believe it's their turn. In my experience, victims are not overcome with greed. Instead they are encouraged to think about the nice things they can do for their families or communities with the money. Perhaps they want to help out a relative in financial distress or they have a grandchild who wants to go to college. For many older adults, taking the bait may be a way to increase their importance in the lives of their families.

Victims are told to keep this secret. The crooks caution victims that they must not tell anyone about this award before they receive their winnings. This makes it less likely that the victim will consult with someone else before sending money. Some victims (the Jamaicans call them “whales”) just keep sending money while they are strung along with reasons why they must send more and more. There are many consumers who have lost hundreds of thousands of dollars in a vain attempt to collect their “winnings.” Scammers are also known to have sent flowers or birthday cards and pose as a real friend.

Threats. Even people who are perfectly mentally fit may send additional funds due to threats. The Jamaicans can use Google Earth to look at an actual picture of the victim’s house. Then they can call, describe the house and claim to be nearby. They sometimes threaten the victims or their families with physical violence if they do not send more money. There are no instances I have heard of where anyone actually followed through on these threats.

Sunk costs. When people have already sent some money ,they are already invested in the transaction, and often believe that sending just a little more will produce the money they are promised.

Negative life events. In a nationwide phone survey of consumer fraud, the FTC asked victims whether in the last two years they had “experienced a serious negative life event, such as a divorce, the death of a family member or close friend, a serious injury or illness in your family, or the loss of a job.” Those who had such an event were two and a half times more likely to have been a fraud victim.

Mental decline. Of course there are some people who are suffering cognitive difficulties such as mild cognitive impairment, dementia or Alzheimer’s disease. These people often continue to send money, often hundreds of thousands of dollars. Not long ago, I heard from a law school friend whose father was a retired college president. He had sent tens of thousands of dollars to these scammers. In another case reported by CNN, an older man suffering from Alzheimer’s continued to send all of his funds and committed suicide at the end when the money never appeared.

Here are some tips to help protect your friends and family from being defrauded:

If callers want money, they are crooks. No true lottery or sweepstakes ever asks for money before providing the winnings. None.

Call the lottery or sweepstakes company directly to see if you won. You can reach Publishers Clearing House at 800-392-4190. You can find out if you won a Mega Millions or other large lottery by calling the North American Association of State and Provincial Lotteries at 440-361-7962 or your local state lottery agency.

Do an internet search of the telephone number. Often, the same number has been reported as fraudulent by someone else. And be aware that Jamaica calls often show up as coming from area code 876.

Law enforcement does not call and award prizes. Over a six-month period while I was at the FTC, I received at least half a dozen calls from consumers who thought I had called and told them they had won a lottery. These individuals had been told that since there was so much fraud in lotteries that the FTC had taken over the job of awarding prizes. This is not true. Talk to a trusted family member or your bank. They may be able to help.

File a complaint. You can lodge a complaint with the Federal Trade Commission by calling 877-FTC-Help. For law enforcement help, call the Postal Inspection Service, even for phone scams. Reach them at 877-876-2455. You can also complain to the Senate Subcommittee on Aging Fraud hotline: 855-303-9470.

Victims can also call local police, especially if threats are being made.