6 Canadians Named In Lottery Indictment -- Scheme Allegedly Targeted Elderly

A federal grand jury has returned a 113-count criminal indictment accusing six Canadians of conspiring to run an international mail and telemarketing lottery scheme in the United States.

The 52-page indictment, filed yesterday in U.S. District Court in Seattle, describes a scheme targeting elderly victims who were enticed to buy chances, shares and interests in various lotteries.

An earlier affidavit estimated that the scheme's proprietors took in some $70 million in 1995 alone. Among the victims, prosecutors said, were a 73-year-old Seattle resident who lost about $100,000, and a 59-year-old Californian who lost about $220,000.

The indictment follows a complaint filed in June by the U.S. attorney's office which asked a federal court to turn over $12 million seized from a Smith Barney brokerage account in Bellevue. A decision on the complaint is pending.

The $12 million, documents allege, was invested in security accounts by James Blair Down, the man prosecutors characterize as the scheme's ringleader. Authorities think the money was part of the operation's profits.

Down, 53, of Barbados and Vancouver, B.C., owned and operated several mail and telemarketing operations that took part in the scheme, including Winner's Marketing, World Project Management and T.C. Interglobe Services, the indictment says.

The lottery-sales operation was fueled by mass mailings from several locations and calls from telemarketers based in Canada, according to the indictment. Victims allegedly were invited to buy chances and interests in lotteries by pooling their money with other participants.

Court documents say that after participants had spent $50,000 to $100,000 without winning, they were admitted into a "VIP program" and were sent payments of $5,000. But when victims made subsequent claims for winnings, they were encouraged to reinvest in other lotteries, documents say.

Those named in the indictment were Down; Fraser Barnes, 31, of Barbados; Trevor Street, 30, of Delta, B.C.; Linda Stromberg, 41, and Ravinder Hayer, 31, of Vancouver, B.C.; and Celedonia Cleto, 47, of Barbados and Vancouver.

The charges they face include conspiracy, illegally importing and mailing lottery material, using fictitious names, interstate transport of gambling proceeds and materials, and money laundering.

None of the scheme's principal players is in custody because they have yet to be extradited, prosecutors said.

The indictment is the result of a criminal investigation started five years ago by the U.S. Postal Inspection and Customs services and later joined by the Internal Revenue Service's criminal division.

Jake Batsell's phone message number is 206-464-2595. His e-mail address is: jaba-new@seatimes.com