The Department of Justice announced last week that it had filed a criminal complaint against three individuals for defrauding seven elderly victims of $695,000 through a phony sweepstakes scheme.

The three defendants, Ana Gonzalez, Sandra Leon and Ivan Pelaez, were charged with wire fraud and conspiracy. The latter two are currently being sought.

The scam allegedly involved victims who were told they had won a sweepstakes and were eligible to receive cash prizes as high as $3.5 million. Some of the victims were told via letter or phone call that a federal government agency, such as the Government Accountability Office, operated the sweepstakes.

The victims were then instructed to send money to a post office box or bank account, supposedly to pay for fees and taxes due on the winnings. The post office boxes were set up in Suffolk County and Manhattan, NY, and the bank accounts were established in the Hamptons.

Of course, there was no sweepstakes and the victims never received any winnings. Legitimate sweepstakes are supposed to be free and fun. They must explicitly state that no purchase is necessary and that you never have to pay money to collect your winnings.

If you are ever asked to pay money to participate in or collect from a sweepstakes, it is a scam. The U.S. Postal Inspection Service in conjunction with the Direct Marketing Association has issued warnings to help victims recognize fraudulent sweepstakes.

These are questions you should ask to evaluate whether a sweepstakes is legitimate:

1. Does the promoter ask you for personal financial information, such as the numbers for your checking account or credit card? This is not information required by a legitimate sweepstakes.

2. Do you receive an urgent request to make a payment or wire money? Do they try to pressure you by giving you a payment deadline in order for you to collect your winnings?

3. Does the advertisement for the sweepstakes explicitly state that no purchase is necessary and that a purchase will not increase the likelihood of winning? Any purchasing requirements are not legitimate and indicate you are dealing with a scam.

If you have received mail bearing the tell-tale signs of fraudulent sweepstakes, contact the U.S. Postal Inspection Service and fill out an online Mail Fraud Report.

The report will ask you a number of questions, including:

  • How and when were you contacted?
  • How did you respond to the offer?
  • What did you receive?
  • How much money were you asked to pay?
  • Did you lose money?
  • What kind of scheme was it? There is a category drop-down list that includes "Contest, Prize or Sweepstakes."

As federal law enforcement agents, the Postal Inspectors have the authority to serve subpoenas and warrants, and to make arrests.