FTC Obtains Court Order Against Fake Prize Scheme Operation

The Federal Trade Commission has closed the book on a scheme that tricked people into paying $25 to collect a $1 million prize they supposedly had won. Those who paid got nothing.

After weighing written arguments from the FTC and the defendants, a federal court issued a default judgment resolving FTC charges brought in September 2016, alleging that David Raff, Millenium Direct Incorporated, Ian Gamberg and Terry Somenzi mailed fake prize notifications to mostly elderly consumers that stated, after the recipient’s name, “ . . . this is NOT a preliminary or qualification letter of cash prize status; YOU HAVE WON A CASH PRIZE!”

In addition to sending many apparently unrelated prize mailings, the defendants sold consumers’ personal information to other schemes, causing many people to receive numerous deceptive cash prize notifications and other offers. Many consumers paid substantial sums of money in response to repeated mailings promising prizes.

Under the order announced today, Raff and Millenium Direct are required to pay $501,895, and they are banned from the prize promotion business and from misrepresenting any good or service. Gamberg was banned from misrepresenting any good or service under a settlement reached in February 2017. The case against Somenzi was dropped after he passed away last year.

The case is part of an international law enforcement initiative against mass-mail fraud. At the FTC’s request, the U.S. District Court for the Central District of California entered the default judgment against Raff and Millenium Direct on July 24, 2017.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs and subscribe to press releases for the latest FTC news and resources.

IR Press

Recent Posts

Treasury Issues Final Rule Expanding CFIUS Coverage of Real Estate Transactions Around More Than 60 Military Installations

WASHINGTON – Today, the U.S. Department of the Treasury (Treasury), as Chair of the Committee…

4 days ago

U.S. Department of the Treasury’s CDFI Fund and Federal Housing Finance Agency Collaborate to Bolster CDFI Access to Capital

WASHINGTON—Today, the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) and…

4 days ago

Report on U.S. Portfolio Holdings of Foreign Securities at Year-End 2023

Washington – The findings from the annual survey of U.S. portfolio holdings of foreign securities…

5 days ago

READOUT: U.S. Department of the Treasury Hosts Roundtable Discussion on the Financial Sector’s Response to Recent Hurricanes

WASHINGTON – The U.S. Department of the Treasury hosted a roundtable on October 30 with…

5 days ago

READOUT: Sixth Meeting of the Financial Working Group Between the United States and the People’s Republic of China

WASHINGTON – The United States and the People’s Republic of China held the sixth meeting…

5 days ago

Treasury Sanctions Key Members of La Linea, a Group Involved in Trafficking Fentanyl into the United States

WASHINGTON — Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned…

5 days ago