Wednesday, December 20, 2017

Two Defendants Plead Guilty In Multimillion Dollar Prize Promotion Scams Targeting Elderly Victims

The U.S. Justice Department released the below information:

Two individuals who ran multimillion dollar prize promotion scams entered guilty pleas Dec. 12 in federal court in Las Vegas, Nevada, the Department of Justice announced.

Glen Burke, 57, of Las Vegas, pleaded guilty to contempt and conspiracy charges arising from his operation of two predatory schemes that defrauded thousands of victims, many of whom were elderly, out of more than $20 million.  Burke conducted those fraudulent campaigns in violation of a 1998 court order obtained by the Federal Trade Commission (FTC) permanently banning him from telemarketing and making misrepresentations to consumers.  A co-defendant, Michael Rossi, 52, also of Las Vegas, also pleaded guilty in connection with one of Burke’s schemes.

“The Department of Justice is determined to punish the perpetrators of fraudulent schemes that exploit consumers, especially those that target the elderly or vulnerable,” said Acting Assistant Attorney General Chad Readler of the Justice Department’s Civil Division.  “We will work with our partners at the FTC and the U.S. Postal Inspection Service to eradicate schemes that harm the elderly wherever we find them.”

Burke pleaded guilty to contempt for violating the court order prohibiting him from making misrepresentations to consumers.  That charge stemmed from Burke running a mass-mailing operation that misled consumers into believing that they had won large cash prizes, often millions of dollars. Burke specifically mailed consumers solicitations that used fake names and, in many cases, looked like they came from law firms or financial institutions, advising consumers to pay a fee – usually $20 to $30 –to claim their promised winnings.  Once consumers paid, however, Burke never sent any consumer a promised prize.

Burke, along with Rossi, also pleaded guilty to conspiracy to commit mail and wire fraud for running a fraudulent telemarketing operation.  Telemarketers working for Burke and Rossi falsely told victims that they had won one of five valuable prizes, typically: a Chevy Camaro; a Boston Whaler boat; a diamond-and-sapphire bracelet; $3,000 cash; or a cruise that could be exchanged for $2,300.  To claim the prize, consumers were told to pay hundreds, or in some cases thousands, of dollars.  Once they paid, victims received a nearly worthless piece of costume jewelry or nothing at all.

Sentencing is scheduled on March 12, 2018.  Under the contempt statute, Burke could be sentenced to any term of imprisonment and fine.  Under the conspiracy statute, Burke and Rossi face a potential maximum sentence of 20 years in prison and a $250,000 fine.  The court has the discretion to impose a lower sentence.

Principal Deputy Assistant Attorney General Readler commended the investigative efforts of the U.S. Postal Inspection Service and thanked the FTC for its valuable assistance.  The case was prosecuted by Trial Attorneys Timothy Finley and Daniel Zytnick of the Consumer Protection Branch of the Department of Justice’s Civil Division and Assistant U.S. Attorney Nicholas Dickinson of the District of Nevada.

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