District Court Enters Permanent Injunctions Shutting Down International Mail Fraud Scheme and Approving Civil Penalty of Over $700,000
Defendants Allegedly Defrauded Elderly Victims Over $3 Million Annually
The U.S. District Court for the Eastern District of New York has permanently barred 10 individuals and businesses from operating an alleged multi-million dollar international mail-fraud scheme. The consent decrees entered by United States District Judge Brian M. Cogan resolve civil fraud claims brought by the United States Attorney’s Office for the Eastern District of New York. Five of the defendants – Kimberly Anne Stamps of Gilbert, Arizona and her companies, KPS Productions, LLC, KPS Promotions, LLC, JKS Ventures, LLC and JJMK Enterprises, LLC – also agreed to pay a $726,539.20 penalty, the largest civil penalty ever collected in the EDNY for a violation of a United States Postal Service (USPS) cease and desist order against a mass mailer.
The United States alleged that beginning as early as 2012, the defendants operated a multi-million dollar mass-mailing scheme that preyed upon elderly and vulnerable individuals. From May 2015 to January 2018, the defendants mailed over 4.8 million solicitation letters to recipients in New York, throughout the United States and abroad falsely indicating that the recipients had won large cash prizes ranging from hundreds of thousands of dollars to millions of dollars, but were required to return processing fees of $20 to $50 to receive payment. The solicitations were sent on behalf of fictitious organizations and departments, such as “Global Servicing Center,” “Premium Award Center,” “Notification Committee” and “Winners Search Advisory,” and included fake signatures from fictitious corporate officers. The victims who paid the processing fees never received the promised cash prizes.
In one month alone, the defendants received over 16,000 responses to their schemes from victims worldwide. One victim of the defendants’ scheme, who resides in Brooklyn, returned more than 400 responses to defendants’ fraudulent solicitations, with total payments exceeding $10,000. The United States estimates that before the scheme was shut down, the defendants received more than $3 million in victim payments annually.
The foregoing are allegations, which the defendants dispute, and there has been no trial or any permanent judicial finding of fact or law.
“The defendants misled elderly and vulnerable victims by promising life-changing cash prizes that never arrived,” stated United States Attorney Donoghue. “The court-ordered injunctions permanently stop these schemes, and the civil penalty should serve as a warning to other fraudulent mass-mailers that we are committed to protecting the public from these schemes, and will hold the perpetrators and enablers of such schemes accountable.” Mr. Donoghue thanked the United States Postal Inspection Service for its investigatory support.
“Sweepstakes mailers thought they were winning the big prize. That is, until Postal Inspectors learned of the misleading solicitations being sent to unsuspecting victims,” stated Melisa Llosa, USPS, Inspector in Charge of the Phoenix Division. “As the law enforcement branch of the Postal Service, the U.S. Postal Inspection Service has a long history of successfully investigating these fraud schemes. Postal Inspectors work tirelessly to protect the American public from exploitation through the U.S. Mail.”
The case is being handled by Assistant U.S. Attorneys Evan P. Lestelle and John Vagelatos.
Additional information on the original enforcement actions and mass mailing schemes is available at: https://www.justice.gov/usao-edny/pr/justice-department-coordinates-nationwide-elder-fraud-sweep-more-250-defendants. Information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice.
KIMBERLY ANNE STAMPS
YURIKO ESPINO RAMOS
Las Vegas, Nevada
KPS Productions, LLC
KPS Promotions, LLC
JJMK Enterprises, LLC
JKS Ventures, LLC
YR Mail Services, LLC
Western Mailing Services
Cyber Solutions, Inc.
E.D.N.Y. Docket No. 18-CV-1106 (BMC)