Dec. 22, 1999
Public Citizen, AARP Join
to Help Victimized Older Persons
WASHINGTON, D.C. — Public Citizen and AARP today will seek to intervene in an appeal in Vancouver, British Columbia, to help recover millions of dollars obtained from older Americans in lottery and sweepstakes schemes.
The victims — estimated to exceed 1 million — lost money in a sophisticated scam that used telemarketing and direct mail solicitations to convince people that they could make fortunes by purchasing chances in foreign lotteries and by entering sweepstakes and puzzle contests. The businesses operated primarily from Canada and Barbados in various forms and under various names from the 1980s through 1998. They shared several features, primarily mailings and phone calls that misrepresented the odds of winning a prize or the amount of payment necessary to participate in a prize promotion, and then asked entrants for cash, checks or credit card numbers.
The enterprise was run by James Blair Down, a British Columbia resident whose organization is believed to have netted at least $200 million. Under the terms of a plea agreement, he served only six months in jail in Oregon and agreed to pay just $12 million in fines and restitution.
Interclaim, an Ireland-based company, stepped in to find and return the victims? money ? seeking half for its efforts plus its costs. Interclaim filed a petition for involuntary bankruptcy against Down in a Canadian court. The court granted the company?s request to freeze Down?s assets and provide access to his financial records.
Down then objected to Interclaim?s role, and the court sided with him, tossing out the case based on an 800-year-old legal doctrine called “champerty,” which prohibits a stranger from pursuing another party?s litigation in exchange for a share of the proceeds. Interclaim has appealed, and Public Citizen and AARP are seeking to intervene in order to protect the interests of Down?s numerous victims.
“The evils that the doctrine of champerty was designed to address are non-existent in this case,” said Alison Van Horn, a Public Citizen staff attorney. “Application of the doctrine here would merely deprive the victims of their right of access to the courts.”
According to Deborah Zuckerman, a staff attorney with the AARP Foundation, “The lower court felt bound by precedent to dismiss the case but recognized that Down?s victims are unlikely to recover any money if the case does not proceed. We want the Court of Appeal to be mindful of this too.”
In their motion to intervene, Public Citizen and AARP point out that the court can use protections found in bankruptcy and class action law to compensate and protect Down?s victims. The motion also notes that this case should be considered in the context of the victims? right of access to the courts and the difficulties in combating telemarketing fraud.
Public Citizen and AARP are being represented by Gordon Fulton and Peggy Stanier of Boughton, Peterson, Yang, Anderson, in British Columbia.
Public Citizen is seeking to be involved because it is a consumer advocacy group that has been extensively involved in many consumer-related class action lawsuits. AARP represents the interests of older Americans and has been actively investigating telemarketing and direct mail frauds, which frequently target older people.