The US Attorney for the Southern District of New York recently announced that four defendants have been extradited from Israel on charges relating to their participation in multiple lottery telemarketing fraud schemes. Many of those charged in two indictments in 2008 and 2009 have already been arrested and have either plead guilty to conspiracy and/or fraud charges or been found guilty by bench trial.

The four recently extradited include Avi Ayache, Yaron Bar, and Ian Kaye, all of whom were arrested in Israel back in July of 2009 awaiting extradition to the United States. The fourth man, Shai Kadosh, who was indicted back in September 2008 was a fugitive until he was arrested in Israel in December of 2011.

The four men and their co-conspirators allegedly operated phony “lottery prize” schemes out of numerous boiler rooms in Israel. The schemes targeted hundreds of victims, mostly elderly, throughout the United States. To identify potential victims, the defendants purchased from list brokers the names and contact information of U.S. residents who subscribed to sweepstakes lotteries. They then contacted the victims and solicited information about their finances by falsely telling them they had won a substantial cash prize that they would receive as soon as they paid the necessary fees and taxes. In reality, there was no lottery prize. Collectively, the American victims in these lottery fraud schemes lost approximately $25 million.

Ayache, Bar, Kaye, and Kadosh are each charged with one count of conspiracy to commit wire fraud and mail fraud through telemarketing, which carries a maximum penalty of 30 years in prison. In addition, Ayache, Bar, and Kadosh are each charged with two substantive counts of wire fraud through telemarketing, each of which carry a maximum potential penalty of 30 years in prison. Ayache and Bar are also charged with conspiracy to commit money laundering, which carries a maximum potential penalty of 20 years in prison. The enhanced fraud penalties are a result of the telemarketing scheme employed by the defendants. According to 18 U.S.C. 2326 there is up to a 10 year penalty enhancement when the fraud is carried out by telemarketing and targets at least 10 elderly people over the age of 55.

The government will also seek forfeiture and mandatory restitution of up to $25 million in substitute assets to recover the defendants’ ill-gotten gains.

The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.

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