Sweepstakes and lottery scams are always among the most prevalent and effective scams used to steal money from unwary victims. The essence of many of these phony lotteries is the same. You are notified that you have won a lottery that you never entered, but have to pay various fees and taxes before you can claim your prize. In some variations of this scam, you are actually sent a counterfeit check for an amount that is more than the amount you are asked to pay. You are instructed to deposit the check and then wire the fees back to the contest sponsors. Although it may be hard to imagine people falling for these scams, many people do indeed become victims of these scams. Recently Joseph Nkunzi and Safia Ahmed were arrested in Washington after being indicted for running a phony lottery scam in which a 78 year old California woman was scammed out of $182,000 after being told on the phone that she had won 8.8 million dollars from the North America Prize Pool.
As I always tell you, it is hard enough to win a legitimate lottery; it is impossible to win one that you have not entered. That should be the first sign that the lottery is a scam. In addition, legitimate lotteries do not charge you fees in order to claim your prize. Lottery winnings are, indeed, subject to income taxes, but those taxes are either deducted from the winnings before you receive the rest of your prize or they are the responsibility of the prize winner. Lottery sponsors never collect tax payments from winners on behalf of the IRS. Also, as I have described in many “Scams of the day,” you should also be skeptical when you receive, for whatever purpose, a check for more than what you may owe someone who then asks for you to send the overage back to the sender. This is a red flag that you are dealing with a counterfeit check and a scam.