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Hundreds of thousands of mailings claimed the victims were "specially chosen" to receive a large cash prize, the government said.
All they had to do was pay a "fee" of from $20 to $40 to collect their prize, a federal indictment says.
Many unfortunately fell for it, authorities said.
The indictment returned in U.S. District Court in Brooklyn names Shawn Phillips, 52, of British Columbia, Canada, as the ringleader of a scheme that preyed on innocent victims for more than three years.
Charged with multiple counts of mail and wire fraud along with him are Jeffrey Novis, 79, of Long Island, and Phillip Priolo, 58, of Hallandale Beach, Florida.
Phillips ran the scheme from June 2013 to November 2016, the Justice Department said in a release.
"Although the notices appeared to be personalized correspondence, they were, in fact, mass-produced, boilerplate documents that were bulk mailed to recipients whose names and addresses were on mailing lists," it said.
Novis opened bank accounts for the purpose of depositing checks mailed by the victims, then transmitted the funds to Phillips, the indictment alleges.
The scammers fleeced victims out of a combined $10.8 million, it says.
Novis and Priolo got their own scheme going, mailing hundreds of thousands of similar "prize" notices, the indictment alleges. Victims ponied up $2.2 million in response, it says.
The scheme operated by Novis and Priolo "used infrastructure shared by the Phillips scheme," the Justice Department said it in its release.
All three defendants conspired with Sean Novis and Gary Denkberg, the operators of a direct-mail operation based on Long Island, it said. Both men were previously indicted and are awaiting trial.
“Elder fraud schemes present a serious threat to the financial security and the well-being of America’s seniors,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division.
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