Oversight, Regulation

Federal court halts $11 million sweepstakes scam

160px-US-CFTC-Seal.svgA federal court recently halted a seven-year sweepstakes at the request of the FTC, which alleges that the scam stole more than $11 million from consumers in the U.S., Canada, U.K., France and Japan.

The FTC alleges in its complaint that Liam O. Moran of California and his companies sent mass mail personalized letters to consumers telling them they had won a large cash prize usually totaling more than $2 million.

Consumers were told by the defendants that they were guaranteed to collect the prize by sending in a fee of between approximately $20 and $30, saying it was a limited-time offer.

According to the FTC complaint, the letters received by consumers contained “dense, confusing language” on the back of statements that conflicted with the claims of winnings. The defendants claimed on the back of the letter to only provide consumers with a list of sponsors, not that they sponsored sweepstakes.

Moran and his companies sent more than 3.7 million letters over the past two years, including 800,000 letters to consumers in 156 countries during the first half of the year. Since 2009, the defendants have collected more than $11 million from consumers.

The court order temporarily halts the illegal conduct, freezes the operation’s assets and appoints a receiver while the FTC proceeds with the case.

Co-defendants in the FTC complaint include Applied Marketing Sciences, Standard Registration Corp., also doing business as Consolidated Research Authority and CRA, and Worldwide Information Systems Inc., also doing business as Specific Monitoring Service, Specific Reporting Service, Universal Information Services and Compendium Sampler Services.

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