As a financial fraud against the elderly goes, it's a classic.
For months, 84-year-old Martha C.'s mailbox in the Sacramento area was cluttered with sweepstakes letters. Often marked "Urgent" or "Prize Research Intelligence Agency," the letters wooed her with enticing-sounding offers of potential big winnings.
Trying to better her chances, she sent in $10 here, $20 there. With a son and a disabled daughter who could use the money, the churchgoing widow was always hopeful.
Then a few weeks ago, Martha, who asked that her last name not be used, got the phone call she'd been waiting for.
"Congratulations! You've won!" said the caller, claiming to be from Publishers Clearing House, the well-known sweepstakes company.
Her prize: $42,000.
To collect: Go to her bank, withdraw $2,600 - to cover "luxury taxes" - and wire the money to a Western Union office in Atlanta.
In three days, the caller said, her $42,000 check would arrive in the mail.
Martha had misgivings - "I'm always suspicious when someone is giving away money, but there's always a chance" - but she did as instructed. "I knew as soon as I got in the bank I was making a mistake," she said.
Her instinct was right. It's been more than three weeks and her $42,000 check has never arrived.
Nor does she have any hope of getting back her $2,600 - or the $140 she spent to wire the money.
Instead, she's received an escalating series of calls from other telemarketing solicitors, urging her to send them money - sometimes belligerently, she says. And there's the daily mail deluge: In one recent week, Martha received about 30 sweepstakes- type letters from across the country.
Sweepstakes fraud is perhaps the best known of so-called mass marketing schemes - including investment scams and other money fraud by mail, phone or e-mail - costing consumers more than $3.4 billion between 2001 and 2006, according to the FBI.
Last year, it was the secondmost common type of telemarketing fraud in the United States, according to the National Consumers League.
"More than half of the scams that are geared toward seniors are generated by a phone call," said James Perry, spokesman for the National Consumers League. "Scammers are better able to sweet-talk or otherwise convince seniors, who may be more trusting, into handing over their money."
And it shows no sign of decreasing. "It's increasing nationwide and worldwide because it's very lucrative and very difficult for law enforcement to stop it completely," said Randy Wolverton, an expert in elderly fraud with the FBI's economic crimes unit in Washington, D.C. He said the FBI believes these scams are "vastly underreported" because of the reluctance of many elderly to report being a victim.
And as in Martha's case, once a person sends money - even a small amount - to a phony sweepstakes company, the con artists begin ramping up with repeated phone calls and mailings.
"Once they get that first piece of money, they're relentless," Wolverton said.
The problem can quickly escalate because scammers often exchange or sell their "sucker lists" of victims to other scammers.
Law enforcement officials say it's exceedingly difficult to track the perpetrators. They use phony addresses, provide phone numbers to disposable cell phones and, in recent years, have increasingly moved their operations to Canada or overseas.
According to the California attorney general's office Web site, the companies "seldom are found in the same state as the consumer, often are in another country, or cannot be found at all. They hide their true ownership, thereby making prosecution very difficult."
Even if shut down, they often reappear with a different address or location.
State and federal law make it illegal to require someone to make a purchase to enter a sweepstakes. But the wording on sweepstakes mailings can be deliberately confusing and designed to skirt the law.
Herschel Elkins, California special assistant attorney general, said seven years ago California and some 23 other states got injunctions and levied millions in investigative fees against several major companies involved in sweepstakes offers, including Time Inc., Readers Digest and Publishers Clearing House, after accusing them of misrepresenting the chances of winning. Many of their mailings targeted the elderly.
Call The Bee's Claudia Buck, (916) 321-1968.
