FTC Shuts Down Sweepstakes Scam Operators in Landmark Settlement

Federal Trade Commission

WASHINGTON, D.C. — The Federal Trade Commission (FTC) has secured settlements against the operators of a large-scale sweepstakes scam that defrauded consumers out of millions of dollars. The settlements permanently ban Matthew Pisoni, Marcus Pradel, and John Leon from engaging in sweepstakes or making claims about prizes.

Background of the Case

The FTC first filed its complaint against Pisoni, Pradel, and Leon in 2015. The defendants allegedly operated a widespread scam, misleading consumers into believing they had won substantial cash prizes. The FTC claims the operation swindled over $28 million from victims in the United States and other countries, including Australia, Canada, France, Germany, Japan, and the United Kingdom.

How the Scam Worked

The defendants sent personalized letters to consumers, falsely claiming they had won large cash prizes, often exceeding $2 million. To claim their “winnings,” recipients were instructed to send a fee of $20-$30 by cash, check, or money order within ten days. The letters warned that failure to pay the fee would result in forfeiture of the prize. In reality, no prizes existed. The defendants had no association with any legitimate sweepstakes and could not award any prizes.

Legal Actions and Settlements

Under the terms of the settlements, Pisoni, Pradel, and Leon are permanently banned from participating in any sweepstakes or prize promotions. They are also prohibited from any deceptive practices related to products or services and cannot use any consumer information obtained through the scam.

Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, commented on the case, stating, “While these settlements will keep these defendants from harming more consumers with bogus prize claims, they will unfortunately not return money to consumers.”

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This inability to compensate victims is due to a 2021 Supreme Court ruling in the AMG Capital Management case, which limited the FTC’s ability to recover money for consumers. Levine emphasized the need for legislative action, saying, “It is urgent that Congress restore the Commission’s ability to make consumers whole when they are targeted by scammers.”

Balancing Triumphs and Trials in the Fight Against Fraud

This case highlights several critical issues in consumer protection. First, it demonstrates the effectiveness of FTC actions in shutting down fraudulent operations and preventing future harm. By banning these individuals from participating in any prize-related activities, the FTC removes significant threats from the market.

However, the case also underscores current limitations in consumer restitution. The inability to return stolen funds to victims leaves many without recourse after falling prey to scams. This gap in consumer protection stresses the necessity for Congress to empower the FTC with stronger enforcement capabilities.

A Call to Action

The settlements serve as a stark reminder of the ongoing threat of fraudulent schemes. Consumers must remain vigilant and skeptical of unsolicited prize notifications, especially those requiring upfront payments. The FTC continues to play a crucial role in identifying and dismantling such operations but needs legislative support to maximize its impact.

The FTC’s successful action against Pisoni, Pradel, and Leon represents a significant victory in the battle against consumer fraud. While the settlements prevent further scams by these operators, they also highlight the need for stronger consumer protection laws. As this case progresses, it serves as both a warning to potential fraudsters and a call to action for legislative change.

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