Four Charged For Multi-Million Dollar Elder Fraud Schemes
Four individuals responsible for mass-mailing fraud schemes were charged with allegedly defrauding thousands of elderly and vulnerable victims, the department announced today. Two U.S. individuals and two Canadian individuals were charged for their roles in operating the schemes, which collectively caused tens of millions of dollars in victim losses. Two defendants were charged in the Eastern District of New York and two defendants were charged in the District of Nevada.
“Fraud schemes are intolerable, especially those that harm our nation’s seniors,” said Acting Assistant Attorney General Ethan P. Davis of the Department of Justice’s Civil Division. “As Attorney General Barr made clear earlier this year when he announced record results in the 2020 Elder Fraud Sweep, the Department of Justice is committed to protecting seniors. These two cases illustrate that the Civil Division’s Consumer Protection Branch, together with partners at the Postal Inspection Service, will not stop until the scourge of elder fraud is defeated.”
“These charges demonstrate the Postal Inspection Service will relentlessly pursue these fraudulent schemes until they no longer arrive in your mailbox,” said Deputy Chief Inspector Craig Goldberg of the Postal Inspection Service. “Prize notices like these are mailed in an attempt to trick our elderly and vulnerable Americans, while the perpetrators attempt to hide their involvement around the corner or around the globe. We are committed, with the Department of Justice, to protect our older Americans.”
“These individuals mailed their fraudulent prize promotions to victims in blatant defiance of prior Postal Service consent orders and agreements that prohibited them from doing so. The fact that many of the victims were elderly and vulnerable makes the defendants’ conduct particularly egregious. The Postal Inspection Service will continue its efforts to protect the public from fraud schemes and bring the perpetrators of those schemes to justice,” said Inspector in Charge Philip R. Bartlett.
Two Long-Island Residents Indicted for Multi-Million Dollar Elder Fraud Scheme
An indictment unsealed today charges Long Island residents Sean Novis, 50, and Gary Denkberg, 57, with conspiracy to commit mail fraud and multiple mail fraud and wire fraud counts for running a fraudulent mass-mailing scheme that tricked thousands of consumers into paying fees for falsely promised prizes. Novis and Denkberg made their initial appearances in U.S. District Court for the Eastern District of New York after they were arrested by United States Postal Inspectors Monday morning.
The indictment alleges that, from January 2003 to September 2016, the defendants mailed hundreds of thousands of prize notices that represented that victims were specially chosen to receive a large cash prize and would receive the prize if they paid a small fee. Victims who paid the requested fee, however, did not receive the promised cash prize. Although the notices appeared to be personalized correspondence, they were merely mass-produced, boilerplate documents that were bulk mailed to recipients whose names and addresses were on mailing lists.
According to the indictment, Novis and Denkberg continued to operate their fraudulent mass-mailing scheme in violation of United States Postal Service cease-and-desist agreements and consent orders that they agreed to in 2012. The agreements and orders had permanently barred the defendants from mailing fraudulent prize notices.
Each charge in this case carries a statutory maximum sentence of twenty years in prison, and a statutory maximum fine of $250,000 or twice the gross gain or gross loss from the offense.
The United States Postal Inspection Service investigated the case. The case is being prosecuted by Trial Attorneys Artie DeCastro and Daniel Zytnick of the Department of Justice Civil Division’s Consumer Protection Branch. The Consumer Protection Branch thanks the U.S. Attorney’s Office for the Eastern District of New York for its assistance in this case.
Canadian Nationals Charged For Long-Running Elder Fraud Schemes
In a separate indictment filed on August 5 in the District of Nevada, Canadian nationals Alex Quaglia and Patrick Fraser were charged with mail fraud and conspiracy to commit mail fraud in connection with schemes to defraud consumers by sending deceptive mailing pieces that falsely promised large cash prizes in exchange for payment of a fee. Many of the victims were elderly. The solicitations were sent using fictitious names and were designed to deceive recipients into believing that they had won hundreds of thousands or millions of dollars. To claim their winnings recipients were directed to pay a small fee. In fact, there was no cash prize sent to victims, and Quaglia, Fraser and their co-conspirators pocketed the money sent by victims.
“As alleged in the indictment, victims in Nevada, across the country, and around the world were defrauded of money in connection with the defendants’ schemes,” said U.S. Attorney Nicholas A. Trutanich for the District of Nevada. “Working with our Postal Inspectors and other law enforcement partners, we will identify, investigate, and prosecute criminals – both foreign and domestic – who prey on our seniors and other vulnerable Nevada residents. These fraud schemes can happen to anyone.”
The scheme allegedly caused millions of dollars in losses to thousands of victims. Quaglia was charged with one conspiracy to commit mail fraud count and seven counts of mail fraud. Quaglia’s scheme is alleged to have begun as early as 2000. Fraser was charged with conspiracy to commit mail fraud with Quaglia and with a separate conspiracy charge related to a similar scheme he orchestrated after breaking away from Quaglia’s operation in 2015. Fraser was also charged with six counts of mail fraud. Each charge of the indictment carries a statutory maximum sentence of twenty years in prison along with a statutory maximum fine of $250,000 or twice the gross gain or gross loss from the offense.
The United States Postal Inspection Service investigated the case. The case is being prosecuted by Trial Attorneys Matt Lash and Yolanda McCray Jones of the Department of Justice Civil Division’s Consumer Protection Branch with substantial assistance from Assistant U.S. Attorney Nicholas Dickinson from the U.S. Attorney’s Office for the District of Nevada. The Criminal Division’s Office of International Affairs has also provided critical support.
An indictment is an accusation by a federal grand jury and is not evidence of guilt. The defendant should be presumed innocent unless and until proven guilty.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. In particular, in March 2020, the department announced the largest elder fraud enforcement action in American history, charging more than 400 defendants in a nationwide elder fraud sweep. The department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed 7 days a week from 6:00 a.m. to 11:00 p.m. eastern time. English, Spanish and other languages are available.
For more information about the Consumer Protection Branch, visit its website at www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorneys’ Offices for the Eastern District of New York and District of Nevada visit their websites at www.justice.gov/usao-edny and www.justice.gov/usao-nv.