Senator Klein Exposes Canadian Lottery Scam

State Senator Jeff Klein reported uncovering a Canadian lottery scam on Wednesday, and issued a warning to New York residents.
Senator Klein Exposes Canadian Lottery Scam
4/16/2009
Updated:
4/16/2009
NEW YORK—State Senator Jeff Klein reported uncovering a Canadian lottery scam on Wednesday, and issued a warning to New York residents to be on guard for financial fraud during the economic downturn.

A Bronx resident, James Capizutto, received a letter from Summit Financial Investments stating he had won $250,000 in the Canadian Lottery. The letter enclosed a $4,700 check and instructed Mr. Capizutto to deposit the check in his name and send a “money gram” for approximately $3,000 back to Summit Financial Investments to cover taxes.

Mr. Capizutto contacted Senator Klein, whose office investigated the matter and discovered that the Federal Trade Commission (FTC) had previously investigated another case related to this scam in 2007. At that time, the FTC had charged two businesses from British Columbia, and had requested the Canadian court to order them to provide restitution to their victims.

The scheme works on a principle that most victims would send back the money gram prior to their bank discovering that a bad check had been deposited. As a consequence, the victim would be charged thousand of dollars for the balance of the faulty check as well as incurred penalties.

Senator Klein’s staff attempted twice to contact Summit Financial Investments in Ontario, Canada, but was hung up upon when they revealed their identity. However, when Klein’s office called and posed as recipients of the mailed letter, they received assurance that they would receive the $250,000 after following instructions described in the letter.

“The bottom line is that people throughout this state are struggling financially and promises of monetary rewards are appealing. But please be aware that if it sounds too good to be true it likely is,” said Senator Klein. “Now more than ever I believe it is our responsibility as public servants to make sure we are doing more for our constituents in every way possible. We are pursuing this through every government and legal channel possible and plan to bring those responsible for preying on the innocent to justice,” he added.
 
Senator Klein notified the Canadian Consulate as well as the NY Attorney General’s Office, and encouraged all residents to report similar scams to his office. The matter is currently being investigated by Phonebusters, a division of the Canadian Mounties, which handles telephone scams.