Shawn Phillips, Mail Fraud, New York 2016

Three Charged with Mailing Fraudulent Prize Notices

A New York man, a Florida man and a Canadian national are facing charges for running a fraudulent mass-mailing scheme that tricked consumers into paying fees for falsely promised cash prizes.

The U.S. District Court for the Eastern District of New York unsealed an indictment charging Shawn Phillips, 52, of British Columbia, Canada; Jeffrey Novis, 79, of Long Island, New York; and Phillip Priolo, 58, of Hallandale Beach, Florida, with conspiracy to commit mail fraud and wire fraud, and multiple counts of mail fraud and wire fraud.

The indictment alleges that from June 2013 to November 2016, Shawn Phillips ran a mail fraud scheme that mailed hundreds of thousands of prize notices that falsely claimed that victims were specially chosen to receive a large cash prize and would receive the prize if they paid a fee, ranging from approximately $20 to $40.

Victims who paid the requested fee, however, did not receive the promised cash prize. Although the notices appeared to be personalized correspondence, they were, in fact, mass-produced, boilerplate documents that were bulk mailed to recipients whose names and addresses were on mailing lists.

The indictment alleges that in 2016, Jeffrey Novis opened bank accounts for the purpose of depositing checks mailed by the victims of this scheme, and transmitting the funds to Phillips. The indictment further alleges that from 2013 through 2016, victims paid more than $10.8 million in response to these fraudulent prize notices.

The indictment further alleges that from March 2015 through December 2016, Jeffrey Novis and Phillip Priolo owned and controlled a similar mail-fraud scheme that mailed hundreds of thousands of the same type of fraudulent prize notices. The indictment alleges that during that time, victims paid more than $2.2 million in response to these fraudulent prize notices.

The scheme operated by Novis and Priolo used infrastructure shared by the Phillips scheme. All three defendants conspired with Sean Novis and Gary Denkberg, the operators of a direct-mail operation based out of Long Island, New York, to facilitate the printing, mailing and data-management for their mail-fraud schemes.

Novis made his initial court appearance on Nov. 9 before U.S. Magistrate Judge Steven L. Tiscione of the U.S. District Court for the Eastern District of New York. Priolo made his initial court appearance on Nov. 9 before U.S. Magistrate Judge Lurana S. Snow of the U.S. District Court for the Southern District of Florida.

If convicted, each charge carries a statutory maximum sentence of twenty years in prison along with a statutory maximum fine of $250,000 or twice the gross gain or gross loss from the offense. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Source: https://www.justice.gov/archives/opa/pr/three-charged-mailing-fraudulent-prize-notices