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Lottery scams use real business names to appear legitimate

Mar 13, 2006, 6:29 am

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Vintner Charles Sawyer knew something was wrong when a stranger called wanting to know why he'd been sent a $2,400 check.

As it turned out, someone had used the good name of Sawyer Cellars in a scam that apparently took in scores of people.

"It was frighteningly well done," Sawyer said.

The ruse appears to have been among a number of mail or telemarketing frauds promising people they've won big. To collect, all they need to do is pay a relatively small fee, the story goes.

In this case, recipients got an official-looking letter purporting to come from a Canadian lottery. It explained that lotteries have surplus funds every year from unclaimed prizes and because that money must be awarded to someone, the lucky winners are selected at random from the phone directory.

To get their winnings of more than a half-million dollars, recipients had only to send in $2,205 to cover various fees - less than the enclosed check for $2,400 with Sawyer Cellars' name on it.

Of course, the checks were fake. Legitimate lotteries don't operate that way; you have to enter to win and unclaimed winnings go back into the jackpot.

Still, the notion of free money can be hard to resist, said LaRae Quy, a special agent with the FBI's San Francisco office.

"People get excited," she said. "That's kind of everyone's dream. They're really sucked in, they're seduced by the whole idea of what winning the lottery's about."

"It's a sad thing," said Sawyer, who hopes that speaking out about the scam will warn off potential victims. "We've had people call and say, 'How can I get my money back?' It just is a real shame."

The fake check scams, with their aura of legitimacy, are "really disturbing," said Susan Grant, director of the National Fraud Information Center, a program operated by the Washington, D.C.-based National Consumers League. "It's hard enough for people to sort out what's legitimate and what isn't and this just makes it seem so much more legitimate."

Nationally, more than 200 people reported to the consumers league that they were taken by fake check schemes last year for losses totaling nearly $1 million - a figure that probably is "just the tip of the iceberg," Grant said.

The scams take various forms, in some cases people may be selling something by mail or Internet and get an apparently legitimate check - sometimes a well-forged cashier's check - for more than the selling price. The seller refunds the extra money only to find the buyer's check is no good.

For those on the receiving end, the pitch can be quite convincing. Clark Lounsbury of Winston-Salem, N.C., said he got a fake-check lottery pitch late last year that he briefly thought it might be for real, especially because it was sent by certified mail.

"It was, 'Yeah, we could use that kind of money,'" he said, although about three-quarters of the way through the letter he realized the come-on was a con.

Tracking down scammers can be tough, said Kevin Flanagan of the California Department of Consumer Affairs. Once the money comes in, "they've probably packed up and gone."

"The best defense against these sort of things is really preventive," he said. "If somebody promises you a deal that seems to good to be true, it probably is."

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