Costa Rica Sweepstakes Fraudsters Sentenced

Costa Rica Sweepstakes Scammers Sentenced in Federal court

On December 14, 2006 the three people in the US were sentenced to federal prison for running sweepstakes fraud schemes in Costa Rica that ripped off elderly US consumers.  One Costa Rica room running this fraud took in nearly $10 million.  One Defendant was sentenced to 15 years in federal prison.  Here is the DOJ press release.

How the fraud worked

US consumers received calls telling victims that they had won a large prize from a sweepstakes.  These calls used “spoofed” caller ID’s to make it look like they were coming from area code 202 (Washington DC).  They pretended to be calling from government agencies informing victims of their winnings.   (I know that some of these sweepstakes frauds were impersonating real people at the Federal Trade Commission, including me).  Victims were told to send money by Western Union or MoneyGram to pay a “refundable insurance fee.”  Those who paid were then called again, told that their winnings had increased, and that they needed to send additional money.  Of course no one had actually won anything.

This is, of course, very similar to sweepstakes frauds coming from Jamaica.  See my separate in depth article on Jamaican sweepstakes fraud.

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Conviction of Mystery Shopper Scammers

Mystery Shoppers

One of the more common frauds today are bogus mystery shopper, or secret shopper, jobs.  The U.S. Attorney’s office in Los Angeles on December 6 announced convictions of a Canadian couple that had been running this fraud from Toronto.  Idris Nuradin got 27 months in federal prison, and his wife spent eight months in prison and was released for time served.  Here is the press release: canadian-telemarketers-nuradin-gayad-sent-299    And article on this case in Canada.

What is mystery shopping?

Businesses do hire people to go to stores and evaluate customer service or the prices being offered by their own stores or those of competitors, but these are not terribly well paying jobs. Often these involve fast food companies.

In fact, the Federal Trade Commission shut down a company advertising nationally several years ago claiming people could make make $200-$500 per week being a mystery shopper – if they signed up with the company for a $100 fee.  It was bogus – you don’t need to pay anyone to get such a job, and there were not nearly as many mystery shopping jobs available as the company claimed. Here is information that case. /marketers-mystery-shopper-scam-settle-ftc-agree-pay-850000


Those truly interested in mystery shopping opportunities might want to take a look at this article.   And there is a trade association for this industry, the Mystery Shopper Providers (MSPA).

What is the scam?

There are a variety of scams that rely on fake checks to rip people off. The Federal Trade Commission received nearly 15,000 complaints about fake checks in 2015.  In the case of the Nuradins, they contacted victims by mail offering recipients jobs as mystery shoppers, and enclosed checks, some of which purported to be from Warner Brothers.  Victims were directed to deposit the check into their own checking account, then to mystery shop Wal-Mart.  Every US Wal-Mart has a MoneyGram counter.  Consumers were told to wire transfer part of the money from the check they had received, write up a report on their experience at the store, and keep the “remainder” as their pay.  But the checks were fake, and victims had simply sent their own money to the crooks.  Wal-Mart has told me that it never hires mystery shoppers.  I’ve seen a number of cases where the fake check was for the sum of $5000, and victims were directed to wire $4600 and keep the “remainder” as their pay.

How do fake checks work?

The frauds obtain checks used by real businesses, perhaps by the theft of mail, scan them into computers, and then print them on check stock.  The check may have the real name and account number of a real company, but any phone numbers on the check will be numbers answered by the frauds. Many of these are cashier’s checks, which most people believe are as good as cash.

When you deposit a check, federal banking rules require the bank to credit the money to your account very quickly, between 1 day (for cashier’s checks) and five days (for many others).    So victims see that the money is in their bank account, and presume that means that the check is valid.  But it is not.  It takes 10 days or more for the actual physical check to move through the system before the banking system determines whether the check is real or counterfeit.

Of course by that time the victim has sent money through Western Union or MoneyGram. The bank does not eat the loss – they simply subtract the funds from the victim’s bank account.  Some fake check victims have even been arrested themselves for using a counterfeit check.

Fake checks are used in a variety of frauds, a subject which will be the subject of a separate article soon.  For more about fake checks see

How can you tell if a check is fake?

Never call the phone number on the check. That will be answered by someone assisting with the fraud.  Instead find the real phone number of the company yourself and call.  Even then, I would recommend waiting at least two weeks before spending the money from the check.

How does this fraud contact victims?

In the case above, they simply sent these offers by mail.  Today they also offer these jobs on internet job boards, through email offers, facebook, and many other ways.  But they all involve sending a check.

 Tips to avoid frauds

  • Those interested in mystery shopping jobs should make sure they are dealing with a reputable company. The MSPA has information here.


  • NEVER send money through Western Union or MoneyGram to anyone you have not met in person.   It is like sending cash. Once the money has been picked up there is no way to get your money back.
  • Try doing an internet search on the check, such as “fake check warner brothers.” You may find other victims that have receive similar checks for the same type of fraud.
  • See the section on filing a complaint on this web site. It is also very important to be sure and also complain directly to Western Union or MoneyGram. They know where the money was actually picked up. (You know where you were told to send it; that is not necessarily where it was received).


Steve Baker

December 15, 2016

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 Around the world, we are seeing a big increase in Sextortion frauds.  As it sounds, this is a combination of sex and extortion.  As you’d imagine, there are occasions when people have photos of themselves unclothed which end up in the hands of sexual predators which use them to demand money.  These are often prosecuted.   But separately there is a worldwide organized crime effort to extort money, with thousands of victims around the globe.

Here is how it works.

A young guy (usually) is contacted on facebook or a dating site by a gorgeous young woman.   After some back and forth, such as email or exchanges or racy photos,  she suggests that they communicate by Skype or another webcam, and things lead to them watching each other performing sex acts.   But what the victim does not know is that the video of him is being recorded.  Thus immediately after the victims if contacted and told that he must pay money or the video will be posted on the internet and shared with all of his friends and family.  Sometimes the scammer claims that the girl was a minor, meaning that this might consist of child pornography, and threatens to contact the police unless the victim pays.

How much of this is there?

We believe the vast majority of victims of this fraud do not file complaints, and thus accurate information on the extent this fraud does not exist.  But both the US military and the UK’s National Crime Agency report that complaints about this fraud have doubled in the last year.  The NCIS itself has received over 300 complaints about this fraud, more than 120 this year alone., which helps internet fraud victims, has received over 15,000 complaints from victims around the world. The US military has come to recognize that its young service members are being targeted.  It seems very likely that the same holds true for other the military in other countries as well.

Here is a good article explaining what the US military is confronting.

What effect does this have on victims?

This fraud does not result only in the loss of money.  It can cause serious emotional distress.  The National Crime Agency reports four suicides in the UK in the last year.  This may pose special problems for victims from strictly religious cultures, such as Muslims.  Note that Romance scams sometimes use the same tactics if victims stop sending money.  See the separate article on romance scam and how they work.

How much do victims lose and how do they pay?

I’ve seen losses range from $500 to $10,000.  If the frauds have access to the victim’s facebook page they may be able to estimate what victims can afford.  Most of the time victims make payments through Western Union or MoneyGram, though a few have paid through paypal.

Where are these scammers and what is being done about this?

There are apparently large organized groups conducting this fraud from the Philippines, Morocco, and the Ivory Coast.  But the victim may not even know where the fraud is actually located.  The organized frauds are difficult to locate and prosecute, though law enforcement in the Philippines, working with Europol, took action in 2014.  They busted several locations where this fraud was running and arrested 58 people.  Here is the press conference announcing the busts.  And this is another news report.

What to do if caught up in one of these?

  •  DO NOT PAY — They will not post your information online. And paying will result in demands for more money.
  •  Victims are understandably reluctant to go to the police, but reporting these is important so that law enforcement can understand how big a problem this is. In addition, reporting may provide information that helps prevent other people from being defrauded.   The FBI’s Internet Crime Complaint Center is also a good place to report these crimes.  Click here to report it.
  • For real help I recommend reaching out to This is a great organization, located in the UK, and it provides a step by step guide for those who have encountered this fraud.


Steve Baker

December 13, 2016

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