Long Island Defendant Pleads Guilty to Multi-Million Dollar Elder Fraud Scheme
Earlier today, in federal court in Central Islip, Lorraine Chalavoutis pleaded guilty before United States District Judge Joanna Seybert to conspiracy to commit mail fraud by participating in a scheme to mail fraudulent prize notices that induced recipients, many of whom were elderly and vulnerable, to believe that they could claim large cash prizes in exchange for a modest fee. None of the victims who submitted fees, which in total exceeded $30 million, received a substantial cash prize. When sentenced, Chalavoutis faces up to 20 years in prison, as well as forfeiture and a fine.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Brian M. Boynton, Acting Assistant Attorney General for the Justice Department’s Civil Division, and Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), announced the guilty plea.
“With today’s plea, Chalavoutis has admitted her role in a nefarious and fraudulent scheme to enrich herself by tricking elderly and vulnerable victims into believing they had won a cash prize that they could collect after paying her modest fees,” stated Acting United States Attorney Kasulis. “Protecting the community from those who commit fraud to deliberately prey on the false hopes of the vulnerable remains a priority of this Office and the Department of Justice.”
“Chalavoutis set up and ran the administrative and financial operations that allowed this fraud scheme to work,” stated Acting Assistant Attorney General Boynton. “The Department of Justice is committed to protecting elderly and vulnerable Americans and to prosecuting those who defraud them.”
“Today’s plea is an example of the coordinated efforts of law enforcement to bring those to justice who prey on vulnerable adults through the distribution of bogus solicitations, luring the unsuspecting ‘prize winner’ to send money in an effort to steal not only their money, but in many cases their independence,” stated USPIS Inspector-in-Charge Bartlett.
Between December 2010 and July 2016, Chalavoutis conspired to mail fraudulent prize notices to thousands of victims throughout the United States. The mailings appeared to be personally addressed to thousands of individuals whose names were on consumer lists obtained by Chalavoutis and her primary co-conspirators, Shaun Sullivan and Tully Lovisa. Chalavoutis created various shell companies for the purported senders of the mailings and hid her co-conspirators’ involvement in the business by using straw owners. Lovisa and Sullivan previously pleaded guilty to conspiracy to commit mail fraud and are awaiting sentencing. In separate cases, several other defendants have also pleaded guilty to conspiracy to commit mail fraud in connection with the scheme.
The government’s case is being prosecuted by Assistant United States Attorney Charles P. Kelly and Trial Attorneys Daniel Zytnick and Timothy Finley of the Justice Department’s Consumer Protection Branch. Assistant United States Attorney Tanisha R. Payne of the Office’s Civil Division is in charge of forfeiture matters.
Greenlawn, New York
E.D.N.Y. Docket No. 18-CR-349 (JS)