Three Charged with Mailing Fraudulent Prize Notices

Three Charged with Mailing Fraudulent Prize Notices

The U.S. District Court for the Eastern District of New York unsealed an indictment today charging a New York man, a Florida man and a Canadian national with running a fraudulent mass-mailing scheme that tricked consumers, many of whom were elderly and vulnerable, into paying fees for falsely promised cash prizes.

The indictment charges Shawn Phillips, 52, of British Columbia, Canada; Jeffrey Novis, 79, of Long Island, New York; and Phillip Priolo, 58, of Hallandale Beach, Florida, with conspiracy to commit mail fraud and wire fraud, and multiple counts of mail fraud and wire fraud.

“Elder fraud schemes present a serious threat to the financial security and the well-being of America’s seniors,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The Department of Justice will continue to pursue and prosecute the perpetrators of these schemes.”

The indictment alleges that, from June 2013 to November 2016, Shawn Phillips ran a mail fraud scheme that mailed hundreds of thousands of prize notices that falsely claimed that victims were specially chosen to receive a large cash prize and would receive the prize if they paid a fee, ranging from approximately $20 to $40. Victims who paid the requested fee, however, did not receive the promised cash prize. Although the notices appeared to be personalized correspondence, they were, in fact, mass-produced, boilerplate documents that were bulk mailed to recipients whose names and addresses were on mailing lists. The indictment alleges that in 2016, Jeffrey Novis opened bank accounts for the purpose of depositing checks mailed by the victims of this scheme, and transmitting the funds to Phillips. The indictment further alleges that from 2013 through 2016, victims paid more than $10.8 million in response to these fraudulent prize notices. 

The indictment further alleges that from March 2015 through December 2016, Jeffrey Novis and Phillip Priolo owned and controlled a similar mail-fraud scheme that mailed hundreds of thousands of the same type of fraudulent prize notices. The indictment alleges that during that time, victims paid more than $2.2 million in response to these fraudulent prize notices.

The scheme operated by Novis and Priolo used infrastructure shared by the Phillips scheme. All three defendants conspired with Sean Novis and Gary Denkberg, the operators of a direct-mail operation based out of Long Island, New York, to facilitate the printing, mailing and data-management for their mail-fraud schemes. Sean Novis and Denkberg have previously been indicted for their role in aiding and abetting these mail-fraud schemes.

“The defendants in this case allegedly operated a mass-mailing scheme that targeted older Americans — a trend Postal Inspectors unfortunately see on a regular basis,” said Inspector in Charge Eric Shen of the U.S. Postal Inspection Service Criminal Investigations Group. “Today’s action should serve as a reminder that Postal Inspectors have a long history of protecting consumers, and will always be ready to bring individuals to justice for their crimes against the American public.”

Novis made his initial court appearance Nov. 9 before U.S. Magistrate Judge Steven L. Tiscione of the U.S. District Court for the Eastern District of New York.  Priolo made his initial court appearance Nov. 9 before U.S. Magistrate Judge Lurana S. Snow of the U.S. District Court for the Southern District of Florida. If convicted, each charge carries a statutory maximum sentence of twenty years in prison along with a statutory maximum fine of $250,000 or twice the gross gain or gross loss from the offense. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The government is represented by Trial Attorneys Bart Dunn and Ann Entwistle the Civil Division’s Consumer Protection Branch. The U.S. Postal Inspection Service Criminal Investigations Group provided investigative support. 

The department’s extensive and broad-based efforts to combat elder fraud seeks to halt the widespread losses seniors suffer from fraud schemes. The best method for prevention, however, is by sharing information about the various types of elder fraud schemes with relatives, friends, neighbors and other seniors who can use that information to protect themselves.

If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud, and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed seven days a week from 6:00 a.m. to 11:00 p.m. Eastern time. English, Spanish and other languages are available.

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at www.justice.gov/civil/consumer-protection-branch. Information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice.

An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

This post was originally published on this site

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