| NEWS RELEASE
UNITED STATES POSTAL INSPECTION SERVICE
James Ray Houston, 65, made his initial appearance in the Central District of California earlier this week (1-12-11) for charges related to a fraud scheme that bilked thousands of victims out of over $25 million. The scheme promised victims pension payments from lottery winnings which would transfer to their heirs upon death. Houston self surrendered to the U.S. Embassy in Costa Rica on Tuesday to answer to charges in the United States. Houston previously lived in Missouri, Nevada and other locations throughout the United States.
According to the indictment the victims were purchasing “positions” in tickets for lotteries that would be grouped together or “pooled” to buy larger blocks of tickets thereby increasing their chances of winning. Funds received from victims were not used to purchase tickets, but to pay “winnings” to other victims, to fund the scheme and to benefit the defendants. Victims were sent checks falsely represented as lottery “winnings,” however the amount of the alleged “winnings” was far less than the amount the victim had sent in.
The indictment alleges that over one million solicitations were sent throughout the United States, offering chances of winning foreign and domestic lotteries such as “The Australian Lottery,” “The International Irish Sweepstakes,” “The El Gordo,” and others. The solicitation packet contained envelopes preaddressed to mail drops in the Netherlands, Ireland and other international locations under the control of the defendants. The defendants established numerous bank accounts in names which sounded similar to official lotteries like Shamrock Agency, World Expert, Old Amsterdam, and German Swiss.
Houston was the final defendant to answer to mail fraud charges related to the scheme in which over one million solicitations were allegedly sent offering increased chances of winning foreign and domestic lotteries.
This investigation was conducted by the United States Postal Inspection Service and prosecuted by the United States Attorneys Office, Central District of California.
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