Thursday, November 20, 2014
Justice Department Files Enforcement Actions To Shut Down "Psychic" Mail Fraud Schemes
The U.S. Justice Department released the below information:
The United States filed civil complaints in U.S. District Court for the Eastern District of New York today against individuals and entities alleged to be running two related multimillion-dollar mail fraud schemes. The United States also filed a motion seeking a temporary restraining order and a preliminary injunction to immediately put a stop to the ongoing schemes.
According to the complaints, the defendants operate two mail fraud schemes in which they send solicitation letters purportedly written by world-renowned psychics to consumers through the U.S. mail. The first scheme, operated by Destiny Research Center and the Canadian company Infogest Direct Marketing, sends direct mail solicitations allegedly written by psychics Maria Duval and Patrick Guerin. The second scheme, operated by Christine Moussu through New York companies CLGE Inc. and I.D. Marketing Solutions Inc., sends direct mail solicitations allegedly written by psychics David Phild, Sandra Rochefort, Antonia Donera and Nicholas Chakan.
“The complaints filed today charge that the companies and individuals made blatant misrepresentations in order to reap financial gain by scamming thousands of Americans, many of whom were elderly and in a vulnerable financial condition,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “Our job at the Justice Department is to put a stop to fraud schemes that seek to take advantage of vulnerable Americans.”
The complaints allege that in the letters, the purported psychics state that they are contacting the recipient based on a specific vision or psychic reading revealing that the recipient has the opportunity to dramatically improve his or her financial circumstance, including claims of winning millions in the lottery.
The solicitation letters appear personalized, repeatedly referring to the recipient by first name and often containing portions that appear handwritten. The solicitations urge victims to purchase various products and services in order to ensure that the foreseen good fortune comes to pass.
The complaints allege that in reality, the solicitations are identical, mass- produced form letters. Victims responded to the solicitations by completing a form and submitting a payment, usually around $20 to $50, via U.S. mail. Victims often also wrote personal, handwritten letters back to the purported psychics, which were never opened, and received worthless, mass-produced trinkets and further solicitations after sending these payments.
“Relying on superstition and fear, the defendants defrauded tens of millions of dollars from thousands of vulnerable citizens,” said U.S. Attorney Loretta Lynch for the Eastern District of New York. “We have, and will continue to, use all means at our disposal to protect our citizens from such schemes to defraud.”
“These mass solicitations containing purportedly personalized messages to unsuspecting victims were blatant fraud,” said Acting Inspector in Charge Troy Raper of the U.S. Postal Inspection Service's Criminal Investigation Group. “Postal Inspectors aggressively investigate any operations that use the U.S. mail to fleece unsuspecting victims.”
Metro Data Management Inc., doing business as Data Marketing Group Ltd., a company on Long Island, New York, along with its president, Keitha Rocco, performed “caging” services on behalf of both mail fraud schemes. According to the complaint, these services consisted of processing victim payments and maintaining databases of consumers who responded to the fraudulent solicitations. The government alleges that Data Marketing Group processed as much as $500,000 in victim payments in a given two-week period for the Destiny Research Center scheme, resulting in annual gross receipts of at least $13 million. The CLGE scheme brought in annual revenue of $1.5 to $2 million. Evidence presented by the United States in support of its motion indicates that victims of the mail fraud schemes were elderly, ill and in perilous financial condition.
The government is seeking an injunction under the Anti-Fraud Injunction Statute immediately shutting down the fraudulent schemes in order to protect victims from further harm. The injunctions sought by the United States would enjoin the defendants from using the mail to distribute the fraudulent solicitations or to collect victim payments, and from selling lists of consumers who have responded to the solicitations. The injunctions would also authorize the U.S. Postal Service to detain any outgoing solicitations mailed by the defendants and any incoming responses to solicitations.
The Justice Department’s case is being handled by the Civil Division’s Consumer Protection Branch and the U.S. Postal Inspection Service, in coordination with the U.S. Attorney’s Office in the Eastern District of New York.
The claims made in the complaints are allegations only, and there has been no determination of liability.