Morgan Hill Police recently recovered a local victim’s $50,000-plus loss in an “advance fee lottery scam.” Authorities say such a resolution is rare in this common fraud scheme.
Police cautioned citizens—particularly the elderly and vulnerable—to be aware of red flags so they don’t fall prey to such scams in the first place.
In November, a relative of an 80-year-old Morgan Hill man called the Santa Clara County District Attorney’s Office to report that the elderly man had fallen victim to a recent scam attempt, according to Deputy District Attorney Cherie Bourlard.
The victim had been contacted on the phone by an unknown suspect who claimed the man had won $2 million in a lottery or sweepstakes prize. To claim the prize, the caller said, the Morgan Hill man had to pay an advance amount of $54,000 to cover fees and taxes, Bourlard explained.
As instructed by the suspect, the victim sent the amount in a cashier’s check to someone in Southern California, who then forwarded the money to an account in New York, according to Bourlard.
The victim realized the next day that this was likely a scam, but it was too late as he unsuccessfully asked his bank to stop payment on the $54,000 cashier’s check, Bourlard said. The check had already been cashed.
As soon as the victim’s family member called the D.A.’s office, prosecutors recommending reporting the fraud to the Morgan Hill Police Department, Bourlard said. The victim reported the crime and it was assigned to Det. Joseph Burdick to investigate and “follow the money.”
“He did an intense, immediate investigation” to find out where the victim’s $54,000 went, Bourlard said of Burdick. The Morgan Hill detective learned the Southern California woman who received the Morgan Hill man’s payment had also recently fallen victim to the same scam.
The woman, also a senior citizen, told police that she was contacted by someone who claimed she had won a prize. The suspect told her that in order to claim her winnings, once the $54,000 from the Morgan Hill man cleared her account, she should send $51,000 worth of cashier’s checks—via overnight FedEx—to a person in New York, Bourlard explained. The suspect told her to send the remaining $3,000 to another unidentified individual.
The woman said she had ultimately been scammed out of about $250,000, and in the recent case she did not know who sent her the $54,000 or that the sender was also a victim. Bourlard said victims such as the Southern California woman are often used by “international criminals” as “money mules” to perpetrate the fraud and avoid identification. The woman, who filed a police report after she realized she too had been scammed, did not know she was being used to further an illegal scheme.
The advance fee scam architects often allow their money mules to keep a portion of the scammed cash and forward the remainder to another mule, and so forth until the bulk of the cash ends up in the hands of an overseas suspect.
“She was an unwitting money mule; she didn’t understand the illicit purpose for which she was wiring the money,” Bourlard said. The woman cooperated with police and shared her bank records with Burdick.
After identifying the account in New York to which the woman in Southern California sent the money, Burdick obtained a search warrant. He determined the account belonged to an employee at a New York law firm, and was able to seize $44,595 of the Morgan Hill man’s money from the bank account, Bourlard said.
The woman in New York, who had received the Morgan Hill victim’s money by way of the Southern California victim, told police that distant relatives had contacted her to receive the money and hold onto it for them, Bourlard said. She returned the remaining balance to the Santa Clara County D.A.’s office, for a total of $51,000.
Morgan Hill police returned this amount to the victim in Morgan Hill, authorities said.
Authorities have declined to prosecute any known parties in the Morgan Hill case because the “money mules…did not appear to have sufficient knowledge of the underlying criminal enterprise to warrant a prosecution,” Bourlard said.
Still, Bourlard—who works in the D.A.’s Elder Fraud Unit—was ecstatic that local police helped the Morgan Hill man recover most of his initial loss. Most victims do not recover their cash in such advance fee scams.
“I was excited about this case because it was reported immediately, (and) it gave Det. Burdick the opportunity to serve these intense search warrants and recover the money,” Bourlard said. Bourlard advised that anyone who falls victim to such scams should report the crime to police as soon as they figure out they have been duped, as the longer the fraud goes unreported, the less likely the victim’s money can be recovered.
The D.A.’s Elder Fraud Unit also offered the following tips to recognize the advance fee lottery scam and avoid becoming a victim:
• All bona fide sweepstakes do not require money up front;
• Companies like Publishers Clearing House never contact winners by telephone or email. Their policy is to contact winners is by way of U.S. mail;
• If you’ve never entered a sweepstakes, then you should not be a winner;
If you have already been contacted by a scammer and/or paid money in an advance fee scam:
• Confirm what is being told to you by trying to contact the company by independent means. Ask for the name of the company. Call law enforcement or the D.A.’s Office to see if this is legitimate;
• If you have sent money and realize you have been scammed, immediately call your bank or wiring company to see if the transfer of funds can be reversed;
• The criminals behind this scam are generally offshore, utilizing local money mules to insulate themselves from detection. Thus, call your local law enforcement agency or the D.A.’s Elder Fraud Unit Hotline at 1-855-DA-Elder (1-855-323-5337) to report the crime;
• Others can report their suspicions about an elder being victimized to the county’s Adult Protective Services Agency at 1-800-414-2002. Reports can be confidential.
Scam reports common in Morgan Hill
Burdick said victims regularly call Morgan Hill police to report similar advance fee scams in Morgan Hill. “We do get reports of these pretty often—on average, one to three a month,” Burdick said. The cases range from misdemeanors—less than $900 scammed from the victim—to felonies where thousands of dollars have been stolen.
Recovery of the victim’s money is rare in his experience, too, Burdick said. “I have never recovered the money before (in an advance fee scam investigation), but in this case we were happy to intercept it,” said the detective.
In an ongoing effort to get the word out and ensure elderly residents are equipped to avoid being scammed, Morgan Hill police officers offer educational seminars for the community’s senior citizens, Burdick added.