The Federal Trade Commission (FTC) has obtained a judgment against David Raff, Millenium Direct Incorporated and Ian Gamberg shutting down a phony lottery scam they were operating. The Court also ordered the pay $501,895 to the FTC. The scam began with letters sent to its targeted victims who were mostly elderly. The letters took the form of a prize notification and read in part “… this is NOT a preliminary or qualification letter of cash prize status; YOU HAVE WON A CASH PRIZE!” The targeted victims were then told that they had to pay a $25 fee in order to collect their million dollar prize. Of course, it was a scam and those who paid the money to the scammers got nothing in return. In fact, it was even worse because the scammers sold the personal information of their victims to other scammers who successfully preyed upon the victims with similar lottery scams.
Lottery scams continue to be one of the most effective scams operated by criminals. As with all lottery scams, it is important to remember that while it is difficult to win a lottery you have entered, it is impossible to win one that you have not even entered. Additionally, no legitimate lottery requires the payment of any fee to collect your winnings and while lottery winnings are subject to income tax, the lottery sponsor does not collect income taxes on behalf of the IRS. They will either deduct taxes from the winnings before giving you your prize or they will give you the entire prize and you are responsible for the payment of taxes.