Lottery scam too good to be true

Published 5:21 pm Friday, May 11, 2007

Imagine opening your mailbox and finding a letter saying you’ve won a lottery, and all you have to do is to use the check that is enclosed with the letter to pay the processing fees.

Sounds great, right? This company sends the money for you to use to pay the fees, so you are not responsible for a dime. Instead, you deposit this check, usually anywhere from $1,000 to $5,000, into your account, write a personal check back to this lottery company, and they send you the rest of your winnings.

Sound too good to be true?

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It is.

Unfortunately, every day letters like this (known as advance fee schemes) are mailed to unsuspecting individuals who desperately want to believe that some good luck has finally come their way. Linda Babb, a Nicholson resident, is one of those individuals.

Babb said she received a letter from a company calling itself Dexia Financial Trust out of Ontario, Canada, stating that she was a winner of a lottery in the amount of $56,370. All Babb had to do was to use the check provided in the amount of $1,981.54 to pay for the processing and administration fees, and then she would receive the remaining balance of $54,388.46. The check was drawn on The Northern Trust Company in Oakbrook Terrace, Ill.

Babb says she was excited at first, because she enters lotteries and sweepstakes occasionally, and was hoping she had finally won.

Babb said she contacted the claim agent named in the letter, Wilcox Ozen, at the phone number provided who told her to either cash the check or deposit it into her account and write a personal check to cover the processing fees. Babb said she was then supposed to send the money to Ozen so he could send her the rest of her winnings.

This reporter attempted to contact Dexia Financial Trust at the number listed in the letter on Thursday. A male answered the telephone, and identified himself as Wilcox Ozen, but when this reporter identified herself and asked Ozen if he was affiliated with Dexia Financial Trust, he said “no” and quickly hung up the phone. An attempt to call the number back received no answer.

When Babb went to her local Regions Bank to cash her check, she found out that while the check was written on a valid account, there was no money in that account and the check was a bad check. Had Babb actually been able to cash or deposit the check, she then would have been responsible for covering the amount of the bad check.

In an email from Rick Swagler, a spokesperson for Regions Bank, Swagler says, “The risk for the customer is that if they deposit a check and either spend the money or wire the money to someone else, and the check turns out to be bogus, they are on the hook for the cash they spent or wired out. That’s why we’ve trained our tellers to spot these frauds when the customer tries to make the deposit. If we identify the scheme early, we have a better chance to protect the customer.”

After Babb found out the check was bad and the scheme was in fact a scam, she contacted the Federal Bureau of Investigation.

FBI Media Spokesperson Debra Madden would not comment on the case, but referred to the many resources on the FBI’s website,, for anyone who wants more information about this and other types of scams. Madden did say however, that a victim of fraud such as this could also contact the Secretary of State, the Attorney General, and the United States Postal Inspectors.

In his email, Swagler said that at Mississippi branches of Regions Bank, tellers come across between one and two dozen of these scams monthly. He also said there is a variation of this fraud that Regions notified employees about just this past week involving travelers checks.

“The bottom line is that if someone you don’t know sends you money you aren’t expecting, you should be very suspicious,” said Swagler.

According to the FBI website, the following are tips to avoid these types of schemes:

– If the offer of an “opportunity” appears too good to be true, it probably is. Follow common business practice. For example, legitimate business is rarely conducted in cash on a street corner.

– Know who you are dealing with. If you have not heard of a person or company that you intend to do business with, learn more about them. Depending on the amount of money that you intend to spend, you may want to visit the business location, check with the Better Business Bureau, or consult with your bank, an attorney, or the police.

– Make sure you fully understand any business agreement that you enter into. If the terms are complex, have them reviewed by a competent attorney.

– Be wary of businesses that operate out of post office boxes or mail drops and do not have a street address, or of dealing with persons who do not have a direct telephone line, who are never “in” when you call, but always return your call later.

– Be wary of business deals that require you to sign nondisclosure or noncircumvention agreements that are designed to prevent you from independently verifying the bona fides of the people with whom you intend to do business. Con artists often use noncircumvention agreements to threaten their victims with civil suit if they report their losses to law enforcement.

Also, Swagler gives these tips to keep in mind:

– You’re not likely to win a lottery you don’t remember entering, particularly one in a foreign country.

– If you get a lottery check and are asked to send back a portion of the winnings to cover fees, it is a scam.

– If you are selling a vehicle, particularly on the Internet, and someone sends you a check for more than the purchase price and asks you to wire the difference back to them, particularly if they are overseas, it is a scam.