New York - A Long Island woman pleaded guilty Monday to participating in a scheme to mail fraudulent prize notices that led recipients, many of whom were elderly and vulnerable, to believe that they could claim large cash prizes in exchange for a modest fee. None of the victims who submitted fees, which in total exceeded $30 million, received a substantial cash prize.
According to court documents, Lorraine Chalavoutis, 64, of Greenlawn, New York, conspired to mail fraudulent prize notices to thousands of victims throughout the United States between December 2010 and July 2016. The mailings appeared to be personally addressed to thousands of individuals whose names were on consumer lists obtained by Chalavoutis and her primary co-conspirators, Shaun Sullivan and Tully Lovisa. Chalavoutis created various shell companies for the purported senders of the mailings, and hid her co-conspirators’ involvement in the business by using straw owners. Lovisa and Sullivan both pleaded guilty to conspiracy to commit mail fraud and are awaiting sentencing. In separate cases, several other defendants have also pleaded guilty to conspiracy to commit mail fraud in connection with the scheme.
“Those who knowingly facilitate fraud schemes, including individuals who play administrative roles in setting up and maintaining the criminal operations, bear responsibility for the harm caused to victims,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The Department of Justice is committed to protecting elderly and vulnerable Americans and to prosecuting individuals who perpetrate and knowingly enable such schemes.”
“With today’s plea, Chalavoutis has admitted her role in a nefarious and fraudulent scheme to enrich herself by tricking elderly and vulnerable victims into believing they had won a cash prize that they could collect after paying her modest fees,” said Acting U.S. Attorney Jacquelyn M. Kasulis for the Eastern District of New York. “Protecting the community from those who commit fraud to deliberately prey on the false hopes of the vulnerable remains a priority of this office and the Department of Justice.”
“Today’s plea is an example of the coordinated efforts of law enforcement to bring those to justice who prey on vulnerable adults through the distribution of bogus solicitations, luring the unsuspecting ‘prize winner’ to send money in an effort to steal not only their money, but in many cases their independence,” said Inspector-in-Charge Philip R. Bartlett of the U.S. Postal Inspection Service, New York Division.
Chalavoutis pleaded guilty to conspiracy to commit mail fraud before U.S. District Judge Joanna Seybert. She is scheduled to be sentenced on Jan. 18, 2022, and faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The U.S. Postal Inspection Service investigated the case. Trial Attorneys Daniel Zytnick and Timothy Finley of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Charles P. Kelly of the U.S. Attorney’s Office for the Eastern District of New York are prosecuting the case.