Costa Rican Sweepstakes Scam Swindles U.S. Citizens Out of Over Half Million Dollars

Arrests - 7

A California-woman pleaded guilty late last year for her role in a Costa Rican sweepstakes fraud that targeted U.S. residents.

From about 2007 to February 2013, con artists in on the scam would call U.S. residents — many of whom were senior citizens — from Costa Rican call centers, telling them that they’d won a substantial cash prize in a “sweepstakes.” They told their targets that in order to receive the money, they had to pay a “refundable insurance fee.”

Patricia Diane Clark, the 56-year-old defendant, admitted that she would then go and pick the money up from the victims, and send it to her co-conspirators in Costa Rica. She also confessed to managing others who performed the same duty in the scam, always keeping a portion of the victims’ payments.

Once victims had sent their money, the call center operatives would then phone again saying that the prize amount had increased through either a clerical error or because another winner had been disqualified, and that they’d need to pay for new purported fees in order to receive the increased amount. The con artists would continue to use the tactic again and again until the victim either ran out of money, or they figured out that it was a scam.

In total, the scheme netted about $640,000 from U.S. citizens.

Clark pleaded guilty to charges of conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering.

Such scams are a more pervasive problem than most realize. Although it’s widely believed to be underreported, a 2009 study from MetLife’s Mature Market Institute estimates that senior citizens lose about $2.6 billion each year as the result of financial abuse, such as fraud.

Not all sweepstakes, of course, are scams. Sweepstakes contests are games of chance — such as random drawings, online instant win games, and scratch and win cards — and though they may come in various forms, they all have one thing in common: they don’t require any purchase or fee to participate. If a contest requires a fee in any way, shape, or form, then it’s a scam.

“I could cite 20 different ways scammers use to capitalize on our company name and sweepstakes,” Publisher’s Clearing House official Christopher Irving told Scam Alert, “but it all comes down to this: At some point, a scam artist will ask you to send money, to pay some type of fees in order to get your prize. We do not make such requests.”

If you discover a prize scam, or one of your loved ones is being targeted, the Federal Trade Commission requests that you report it to their agency, or to the state attorney general, local consumer protection office, or — if the prize promotion came in the mail — the U.S. Postal Inspection Service.