Las Vegas Suspects Indicted in Elder Fraud Scheme

By Grace Austin
Inside Subprime: December 9

Several suspects behind an elder fraud scheme involving phony cash prizes through the mail have been arrested.

Six individuals are being charged with mail fraud and conspiracy to commit mail fraud. One has also been charged with making a false statement to investigators. All the suspects live in Las Vegas.

Five suspects were arrested in mid-November by federal postal inspectors, and another turned himself in to authorities.

The Department of Justice said three other people involved in the scheme already pleaded guilty earlier this year to mail fraud.

The fraud scheme tricked victims into paying a small fee to claim a bigger cash prize. The fee was usually $20 or $30, but the victims never received any prize back. Many of those targeted were elderly.

Officials say hundreds of thousands of consumers were affected, and were scammed out of more than $10 million.

“The Department will pursue and prosecute those who defraud elderly or vulnerable consumers,” said Assistant Attorney General Jody Hunt of the DOJ’s Civil Division. “We have alleged that these defendants perpetrated a cruel hoax on their victims and relentlessly targeted many with repeated fraudulent mailings.”

Multiple suspects allegedly worked at a printing and mailing business and would send the fraudulent mail to victims. They then would pool the profits received from the prize fees, according to authorities.

One suspect allegedly opened victims’ return mail, sorted through the payments, and entered data from the responses into a database. They would then use that information to target previous victims with more mail in an ongoing cycle of fraud.

The fraud scheme carried on for eight years. It only ended after postal investigators executed several search warrants and the Department of Justice issued a court order to shut it down. The defendants supposedly ignored cease and desist orders, and kept perpetrating the scheme, changing the names of companies and the owners’ names of the businesses.

Each of the mail fraud and conspiracy charges carry a minimum sentence of 20 years in prison. The false statement charge one suspect carries a maximum sentence of five years. Each charge also carries a fine of up to $250,000.

As the DOJ indicates, mass mailing is just one way fraudsters victimize seniors. Officials warn that telemarketing and tech support scams are additional methods that can scam the elderly.

“It will be a priority of this office to dismantle organizations like this one that prey on the elderly and vulnerable,” said U.S. Attorney Nicholas Trutanich for the District of Nevada. “We will continue to investigate and prosecute these large-scale frauds that operate in Nevada and across the country.”

For more information on scams, predatory lenders and payday loans, see our city and state financial guides including states and cities like California, Texas, Illinois and more.