Fraudulent Telemarketers Who Claimed U.S. Victims Won Large Sweepstakes Sentenced to Prison for Roles in Scheme
WASHINGTON – The owner of a Costa Rica-based telemarketing call center and two employees of another Costa Rica call center were sentenced for their roles in schemes that targeted and defrauded thousands of American victims of more than $10 million, Assistant Attorney General of the Criminal Division Lanny A. Breuer announced today.
U.S. District Court Judge Frank D. Whitney of the Western District of North Carolina sentenced Michael Kearns, 33, of Sacramento, Calif., to nine years in prison; Herman Kankrini, 44, of Montreal, Canada, to 87 months in prison; and Severin Marcel Stone, 32, of Los Angeles to 90 months in prison. Kankrini was ordered to pay restitution, jointly and severally with other defendants, of $10 million. Kearns and Stone were ordered to pay restitution, jointly and severally with other defendants, of $5 million.
A series of indictments returned by federal grand juries in Charlotte and Asheville, N.C., have charged 46 defendants for their roles in the scheme.
Kearns, Kankrini, and Stone pleaded guilty on Oct. 25, 2007, Jan. 15, 2008, and Oct. 27, 2008, respectively, to conspiring to defraud U.S. residents, most over the age of 55, out of millions of dollars by deceiving them into believing that each had won a large monetary prize in a "sweepstakes contest." According to court documents, calls to victims were made from Costa Rica using Voice over Internet Protocol (VoIP), which utilized computers to make telephone calls through the Internet, thereby disguising the originating location of the calls. Victims were informed that the callers were from the "Sweepstakes Security Commission" and that to receive their "prize," they had to wire thousands of dollars to Costa Rica for a purported "refundable insurance fee." As long as the victims continued to pay, the co-conspirators continued to solicit more money from them.
To date, 33 defendants have pleaded guilty and three have been convicted by jury trials for their roles in the massive fraudulent telemarketing scheme. On Sept. 24, 2008, telemarketing room owner Giuseppe Pileggi, 48, of Montreal, Canada, was sentenced to 50 years in prison, and ordered to forfeit $8.3 million dollars.
The investigation is being conducted by a multi-agency task force, which includes law enforcement authorities from Costa-Rica, the U.S. Postal Inspection Service, the Departments of Justice and Commerce, along with the Immigration and Customs Enforcement a component of the Department of Homeland Security.
The case was prosecuted by Senior Trial Attorney Peter B. Loewenberg and Senior Litigation Counsel Patrick M. Donley of the Criminal Division’s Fraud Section.
An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.