Imagine a new e-mail landing in your inbox. The sender is someone who works for the “Tourism Malaysia Lottery Program,” and claims that you, the e-mail recipient, have just won a $1 million prize from the program. In order to redeem this prize, you are first required to deposit $500 to open a bank account in Malaysia in order to facilitate the transfer of funds.
I’m fairly certain that both you and I would immediately proceed to click the “Delete” button, well-knowing that we would never see a dime. In a complaint recently filed by the U.S. Department of Justice, we learn the story of two individuals who deposited not only the initial required amount but also several hundred thousand dollars in order to redeem their alleged prize. Unfortunately, our instincts were accurate.
To perpetrate the scams, the culprits had each of their victims comply with several requests made beginning in late 2007 through early 2010. The e-mails claimed that in order to retrieve their prizes, certain fees and taxes must first be paid by wire transfer to overseas banks. One victim was under the belief that his money was being used to pay the IRS.
Please take note: I cannot immediately conjure up any circumstances by which a taxpayer situated in the U.S. would satisfy any U.S. income tax obligation by wire transfer to an overseas account. Further, as far as I know, one does not satisfy an income tax liability on lottery winnings by paying the liability out-of-pocket before receiving the winnings. If anything, the lottery payer may be required to withhold a portion of the winnings for remittance to the IRS; alternatively, there may be no withholding and the taxpayer is solely responsible for paying the tax liability directly to the IRS.
As a result of these scams, one victim is now out-of-pocket $428,758, and another $868,438. You’d think that someone who makes a transfer or two of a few thousand dollars would realize something is amiss after not receiving anything. These two victims, however, kept sending more. Approximately 111 wires were sent to 56 accounts among three countries.
The complaint asks for a forfeiture of more than $1.2 million held in various accounts. Similar to poker players with frozen funds on online gambling sites, an individual can file a legal claim for an interest in the funds. Apparently, no such claims have been filed.
(Hat tip: The Blog of LegalTimes)