BISMARCK, N.D. (AP) — A Rhode Island woman accused of funneling lottery scam money between the U.S. 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 U.S. courts, and it will create a template for future investigations, Assistant U.S. Attorney Clare Hochhalter said.
The U.S. attorney's office expects many more investigations in both the U.S. and Jamaica, though Hochhalter believes it will take a combined effort 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 $19 million and a new car, and needed only to pay taxes and fees to collect the prizes.
HOW DID THIS CASE COME TO BE PROSECUTED?
In September 2011, 86-year-old Edna Schmeets, of Harvey, North Dakota, paid those "fees" and lost her life savings of more than $300,000. Authorities opened a case in 2012. The probe involved the FBI, the U.S. 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 $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 behavior" that included forgery, cheating and unlawfully obtaining federal student loans. Defense attorney Kevin Chapman says that isn't relevant.
In 2015, Jamaican airport authorities said they found nearly $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." U.S. District Judge Daniel Hovland on 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 Oct. 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 jewelry seized from Willocks be liquidated and the proceeds doled out to victims.
The property includes the equivalent of nearly $12,000 in U.S. currency and jewelry of unknown worth including gold chains, gold rings, gold and silver bracelets including one with a diamond, and Rolex watches. Hochhalter said authorities are making other efforts to locate forfeitable assets but it's a challenge.
Follow Blake Nicholson on Twitter at: http://twitter.com/NicholsonBlake