Last defendant in J'can lottery scam case goes on trial this week


Last defendant in J'can lottery scam case goes on trial this week

Wednesday, September 12, 2018

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NORTH DAKOTA, United States (AP) — A Rhode Island woman accused of funnelling lottery scam money between the US and Jamaica through her airline job goes on trial in federal court in North Dakota this week. She is the last of 27 defendants in the case that began seven years ago this month. Here's a look at the case and the upcoming trial of Melinda Bulgin, which is expected to last up to 10 days.

Why is this case a big deal?

The Federal Trade Commission estimates that lottery scams could be a billion-dollar-a-year industry in Jamaica. This is believed to be the first large-scale Jamaican lottery scam tried in US courts, and it will create a template for future investigations, Assistant US Attorney Clare Hochhalter said.

The US attorney's office expects many more investigations in both the US and Jamaica, though Hochhalter believes it will take the combined efforts of governments, citizens and law officers to put a serious dent in the Jamaican lottery scam industry.

How do these scams work?

Scammers call victims about bogus lottery winnings, persuading them to send advance fees to receive the purported winnings then keeping the money without paying anything to the victims.

In the scam that launched this case, a woman was told she had won US$19 million and a new car, and needed only to pay taxes and fees to collect the prizes.

How did this case come

In September 2011, 86-year-old Edna Schmeets of Harvey, North Dakota, paid those “fees” and lost her life savings of more than US$300,000. Authorities opened a case in 2012. The probe involved the FBI, the US Postal Inspection Service and the Justice Department's Office of International Affairs and Organized Crime Drug Enforcement Task Force.

Authorities dubbed the case Operation Hard Copy, a reference to lists of prospective victims' contact information used by scammers. They say the investigation determined the sophisticated scam bilked at least 90 mostly elderly Americans out of more than US$5.7 million. Court documents list victims in North Dakota, South Dakota, South Carolina, and Texas, with illegal scam-related activity also alleged in New York, New Hampshire, California, and Florida.

Prosecutors eventually filed conspiracy, fraud and money laundering charges against 27 people. All have pleaded guilty or been convicted except Bulgin, of Providence, Rhode Island.

What will her trial focus on?

Prosecutors say Bulgin worked as a customer service representative for Delta Air Lines and took advantage of the fact that she was able to travel “virtually free” to funnel money.

They call her “not a minor player” in the scam and say she has a past that includes getting expelled from Pace University in New York in 2013 for “untruthful and dishonest behaviour”, which included forgery, cheating and unlawfully obtaining federal student loans. Defence attorney Kevin Chapman says that isn't relevant.

In 2015, Jamaican airport authorities said they found nearly US$15,000 in Bulgin's handbag that she hadn't declared to customs officials. She was arrested three months later in Rhode Island. She was interrogated in both countries.

Chapman maintains that the authorities mishandled the interrogations and violated Bulgin's rights.

Bulgin initially faced 66 counts of conspiracy, fraud and money laundering. Prosecutors late last month sought the dismissal of 51 of the counts, saying it would “allow the United States to effectively focus attention and resources”. US District Judge Daniel Hovland last week Tuesday approved the request. He'll oversee her trial in Bismarck.

Prosecutors say they'll introduce evidence including money transfer records, bank records and emails, and also have testimony from an FBI special agent who has reviewed hundreds of thousands of emails, documents and other records.

Schmeets is on the Government's lengthy witness list, as is Lavrick Willocks, who authorities said masterminded the scam.

Will this trial wrap up the case?

There's another upcoming court hearing of note — Willocks is to be sentenced October 15.

Willocks pleaded guilty in July 2017 to conspiracy in a deal with prosecutors. He faces up to 40 years in prison, though prosecutors will recommend about 10 years because he cooperated.

Will the victims ever get their money back?

Those who have been convicted in the case have been ordered to pay restitution, but it's not known how likely it is that will actually happen.

Hovland in July also ordered that cash and jewellery seized from Willocks be liquidated and the proceeds doled out to victims.

The property includes the equivalent of nearly $12,000 in US currency and jewellery of unknown worth, including gold chains, gold rings, gold and silver bracelets — one with a diamond, and Rolex watches. Hochhalter said authorities are making other efforts to locate forfeitable assets, but it's a challenge.

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