Two Americans and a Canadian allegedly tricked consumers into forking over $10 million in fees in exchange for falsely promised cash prizes in a fraudulent mass-mailing scheme, federal prosecutors in New York announced.
“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 Inspector in Charge Eric Shen of the U.S. Postal Inspection Service Criminal Investigations Group said on Nov. 15. “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.”
An indictment alleges Shawn Phillips, 52, of British Columbia, Canada, mailed hundreds of thousands of fabricated notices between June 2013 and November 2016 that promised alleged victims a cash prize if they paid, on average, between around $20 to $40.
“Victims who paid the requested fee, however, did not receive the promised cash prize,” prosecutors said. “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.”
As part of the alleged scheme, prosecutors claimed in the indictment, Jeffrey Novis, 79, of Long Island, New York, opened up bank accounts to deposit the fees sent in for the purported prizes — $10.8 million in total — and then transferred the money to Phillips.
Novis and Phillip Priolo, 58, of Hallandale Beach, Florida, were also accused of operating a separate, similarly structured mail-fraud scheme between March 2015 and December 2016 and collecting more than $2.2 million.
Phillips, Novis, and Priolo allegedly conspired with Sean Novis and Gary Denkberg, the operators of a Long Island direct-mail business that printed, mailed and data-managed the fraudulent scheme. The two were previously indicted in connection to the schemes.
Phillips, Novis and Priolo are charged with conspiracy to commit mail fraud and wire fraud, and multiple counts of mail fraud and wire fraud. If found guilty, prosecutors noted, each charge carries a maximum sentence of twenty years behind bars as well as a maximum fine of $250,000.
“Elder fraud schemes present a serious threat to the financial security and the well-being of America’s seniors,” Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division said. “The Department of Justice will continue to pursue and prosecute the perpetrators of these schemes.”