Operating from boilerrooms based in Toronto, Canada, the telemarketers persuaded consumers to send anywhere from $29 to thousands of dollars to enter lotteries some consumers were told they were "practically guaranteed to win." Buying and selling foreign lottery tickets is illegal in the United States.
"These telemarketers sold U.S. consumers Canadian lottery tickets, at inflated prices, and exaggerated the chances of winning," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection. "But the people who hit the jackpot were the telemarketers, not the consumers who lost money investing in this scam."
The agency alleges that the telemarketers told consumers -- most of whom were elderly -- that they had been "specially selected" to participate in a system for playing the Canadian lottery that "guaranteed" or "practically guaranteed" that the consumers would win the lottery.
The telemarketers told them that they were "registered" or "sponsored" by the Canadian government to sell the lottery tickets and failed to disclose that it was illegal to sell them to U.S. consumers.
The agency alleges that a very small percent -- generally less than seven percent -- of the money the telemarketers take in goes toward the purchase of lottery tickets. The seven-count complaint filed in federal court charged them with violations of the FTC Act and the Telemarketing Sales Rule.
At the request of the FTC, U.S. District Court Judge George M. Marovich has issued a preliminary injunction against Windermere Big Win International, Inc., Marathon Award Center, Sunshine Fortuity, Inc., and their principals, Ernest Levy (a/k/a Ernie Levy), Alan Silverstein and Michael Levy.
The court froze the U. S. assets of the corporate and individual defendants and appointed a receiver, pending trial. The Department of Justice petitioned a Canadian court to freeze the Canadian assets pending resolution of the case, and those assets have been frozen.
The FTC will seek a permanent injunction barring defendants' lottery telemarketing activities and restitution to consumers or disgorgement of ill-gotten gains. At the Commission's request,
