Judges reconsider sentence in Costa Rica sweepstakes fraud

March 19, 2010

A former call center operator, found guilty on charges of defrauding United States residents of an estimated $1.7 million, filed a successful appeal in federal court alleging that judges erred in the severity of his sentence.

Juan Luis Llamas said his sentence of 132 months jail time and $4.3 million in paybacks was disproportionate to his crime and asked that a higher court reconsider ruling.

On Wednesday, the 4th U.S. Circuit Court of Appeals ordered a reconsideration of the restitution order for Juan Luis Llamas stating that “the district court abused its discretion.”

According to court documents, Llamas moved to Costa Rica in 2004 to work in a sweepstakes scam in which potential victims were lured to pay $1,500 to $3,000 with claims they had won a cash prize.

In order to claim their prize, they were told to wire the cash advance through Western Union to ensure safe delivery.

“No prize money was ever paid, of course, and the fraud scheme continued in this manner until victims were no longer willing to cough up additional funds,” wrote Judge Frank D. Whitney in the opinion document.

Llamas remained in Costa Rica for ten months, during which time he received an average salary of $600 a week to serve as a support staff and office manager for the call center. Two and a half years after he left the country, he was apprehended in California and charged with 42 counts of wire fraud, 19 counts of money laundering and conspiracy to defraud the United States.

Llamas did not act alone in the sweepstakes scheme. In June 2009, Llamas´ former employer Michael Kearns, 33, of Sacramento, Calif. was sentenced to nine years in prison. Two other employees – Herman Kankrini, 44, of Montreal, Canada and Severin Marcel Stone, 32, of Los Angeles – were sentenced to 87 and 90 months in prison respectively. Collectively, they were ordered to pay $20 million restitution.

In total, 46 defendants have been charged for their roles in the scheme and, according to a June press release from the U.S. Department of Justice, 33 have pleaded guilty.

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