Spotting the Foreign Lottery Scam

Today I received the welcome news that I am a big winner in a Canadian Lottery that I never entered. What excitement! Not only did some kind stranger enlist me in a drawing for a share of a 4 million dollar prize, they even sent me an advance on the taxes so I could receive my unsought winnings tax-free.

I have worked behind the counter of a bank for a number of years, and I have freakishly good luck with sweepstakes, leading to my actually winning several large prizes. I can spot a fake a mile away, and if you read this article, you will be able to as well.

Many of us who have family in the Old Sod remember the Irish Sweepstakes tickets sold in every Irish bar in New York. In those days, the winning number was selected based on the amount wagered on a race, and this amount was published in Irish newspapers. Today's scam offers a much more modern twist--numbers selected randomly by a computer-no possible way of beating a computer right? Unless of course, you programmed it.

So this is one tip-off-the lottery depends on information that is not widely available to the general public and cannot be verified by the simple expedient of reading the lottery results or sports section of a newspaper. My scam, from RMD Securities Inc's, International Claims Department, of 150 King Street, Toronto, specifically warns me to keep mum about my good fortune. Let's not get grasping relatives or the US Postal service excited.

Another tip-off. Foreign lotteries are not legal because the State earns a fortune running its own lottery and does not like competition. It also does not want taxpayers to take their money and decamp for more tax-friendly climes. So the old-timers who actually won the Irish lottery would have to buy tickets to Ireland if they hoped to collect. No Irish Sweepstakes winnings would be helpfully and illegally sent through the US mails.

How about the claim that the enclosed check is to pay taxes? Well, how would they know what your tax rate is, let alone be generous enough to pay your taxes too? Here is what happens when you win a bona fide prize. Before you are sent anything valued at $600 or more you are sent an affidavit to notarize and send back with your claim. All prizes valued at $600 or more are reported to the IRS and a 1099-Misc. Form is sent for your tax return.

When real companies offer prizes for publicity, the cash value of the prize is a deductible business expense. The IRS wants to know who received the money and confirm that it is not awarded to an insider as an illegal kickback. Companies employ outside judging firms or accountants to conduct the drawing so that they cannot be accused of corruption. The absence of an outside judging agency such as DL Blair, Marden Kane or one of the larger CPA firms and no request that you fill out a notarized claim form means the sweepstakes is not legitimate.

Poor presentation is another hint that you are being scammed. For example, my check came in a plain white envelope with no business address. It had a stamp, rather than being metered as any legitimate company notifying 80 winners would do. The outside of the envelope had my name and address typed, and the address was my home address, even though I get all my mail sent to the Post Office and never use my home address as a mailing address. Most offices create a set of labels from merged files for mass mailings and either the label or the envelope itself will have a return address.

Careful examination of the bottom of this cheap, white envelope reveals that it was sent from another address within the 11102 zip code where I live rather than from Canada as the letter purports. Although the letter states that the lottery is a "DE-LOTTO NORTH AMERICAN AND EUROPEAN SWEEPSTAKES LOTTERY" the real scoundrel lives no further than around the corner. This is another tip that someone got my name from a phone book or that the persons involved may have been part of a ring of scammers that once operated out of my building until shut down by the FBI (That story is part of my article: When Debt Collectors Won't Let Go http://www.associatedcontent.com/article/2143777/when_debt_collectors_wont_let_go.html?cat=3.

The enclosed letter featured a poorly colored copied picture of people holding a large check--obviously a bad replica of a picture used by a legitimate firm such as Publisher's Clearing House. The resolution of the photo is terrible, extremely blurry. The paper quality is the cheapest possible. Even non-profits spring for good paper for important letters, and a real envelope features good rag bond paper or colored inks on a logo or return address.

The letter's English is stilted and includes errors such as Office Hour, instead of Office Hours, and business day, instead of business days. The text implores me to say nothing to anyone and not to cash the check until I have called and announced good and clear that they are working with a live pigeon. I am to immediately wire funds for slightly less than the amount of the enclosed check via Western Union to a Raul Padilla. This is an attempted end-run around the US Postal Inspection Service who would get involved if I mailed back a check. The use of either a wire service such as Western Union or private carriers like UPS Ground or FEDEX reduces the likelihood of prosecution for mail fraud.

Now let's examine the check for $2870.25 that I was sent with this mailing. First, notice the company that it is drawn on: Augsburg Fortress. The name of this company and the poorly-reproduced logo above are in a completely different font from the rest of the check and the type is broken as well. It has clearly been added to a legitimate check stolen from another company and then copied with a color copier.

The check boasts that it has the following security protections: colored background, micro-printing in the boarder and an artificial watermark. At first glance it appears to check out, since it does have a colored background and what initially looks like a watermark that says: "Docuguard" in the back. But there is no micro-printing, and the so-called "watermark" has been printed on the reverse in an off-white ink.

A traditional watermark is created when wet paper pulp is passed between screens under pressure and the mark is literally engraved into the fabric of the paper. A more modern process uses random-appearing graphic elements that only display the watermark when viewed through the paper or at a slant. They are not on the paper, but in the paper or formed when the apparently random graphics are viewed at an angle or from the back.

If you look straight down at the check, the watermark will be invisible. If a supposed watermark can be seen by viewing the check from directly above, and if it looks as if it is printed on the check instead of being pressed into the paper fiber or formed from random text elements, it is a fraud. Additionally, a check that uses watermark protection will not read, "Docuguard," but "Void" or a warning that you are looking at a copy and not a real check, as the purpose is preventing the check from being copied. .

How about the micro-printing? What is it and how do I know it is missing? Under "Sources" at the end of the article, I have included some information from Printegra, a company that deals in this technology. In a nutshell, very tiny print is used to create a solid line of readable text. If you are dealing with an original document, the text is legible, but once copied, the text disappears and only a line remains. Micro-printing is an advanced technology used in banknotes and is hard for crooks to reproduce successfully.

So why bother to send a fake check? Well, it is possible to create a delay in the check clearing process so that the check appears to be good. The victim deposits the check, waits for it to clear and then remits the funds. Feeling safe, he is shocked when the bank bounces the check and removes the funds weeks or months later. Even if the account has been closed, the bank can and will sue and be reimbursed for the fraudulent check. For more details on how that works, see my article, "Protect Yourself from Con Artists and Bad Check Passers." http://www.associatedcontent.com/article/2270669/protect_yourself_from_con_artists_and.html?cat=3

Additionally, once the check passes through your bank account, it will be coded with information that is very useful to crooks. When the bad check is returned, the thieves will have your bank account information so they can clean you out a second time.

Alas, I will not be making any trips to Europe or Canada on my new winnings. Nor while I be wiring funds anywhere. But I will be sure to spend a little time with law enforcement hunting down these crooks. And they've already made me a few bucks-- the royalties on the article that you just read.

Sources:
http://www.printegra.com/microPrint.aspxhttp://www.printegra.com/marketing/rebrand/sdoSecure.htm