3 Long Islanders Accused Of $30M Elder Fraud Scheme

Three Long Island residents were arrested Wednesday on charges connected to a mass-mailing scheme that tricked elderly customers into paying them up to $30 million in fees for falsely promised cash prizes, according to the U.S. Attorney's Office of the Eastern District of New York.

A 12-count indictment was unsealed in federal court, charging the below individuals with mail fraud and money laundering:

• Lorraine Chalavoutis, 61, of Greenlawn
• Tully Lovisa, 55, of Huntington Station
• Shaun Sullivan, 37, of Merrick

Officials say Chalavoutis, Lovisa and Sullivan would send out prize-promotion mailings that falsely claimed the recipients, who were mostly elderly, could receive a large cash prize in exchange for paying a modest fee.

“These defendants showed a willingness to stop at nothing to bilk unwitting victims of their hard earned cash; many who were deliberately targeted because of their vulnerability,” USPIS Inspector-in-Charge Peter R. Rendina said in a press release. “Postal Inspectors remind you, if you have to pay to play, it’s a scam.”

Lovisa was previously sued by the Federal Trade Commission for sending deceptive prize-promotion mailings. In response, a federal court in the Northern District of California enjoined Lovisa in December 2010 and April 2012 from any involvement with prize-promotion mailings.

Lovisa, however, conspired with Sullivan and Chalavoutis to set up a scheme with numerous prize-promotion companies using straw owners and aliases to continue defrauding consumers, officials say.

Chalavoutis provided operational services, including opening companies and bank accounts in the name of straw owners, and helped conceal the involvement of Lovisa and Sullivan in controlling the operation, officials say.

Lovisa also faces perjury charges for allegedly submitting a false compliance report to the FTC in which he claimed not to be involved in prize-promotion mailings, officials say.

“As alleged in the indictment, the defendants perpetrated a cruel hoax on their victims, many of them elderly and vulnerable, by sending promotional mailings that falsely claimed they would receive tens of thousands of dollars in prize money if they paid a fee,” United States Attorney Richard P. Donoghue said in a press release. “In so doing, Lovisa violated prior court orders directing him to stop engaging in mass mailing operations and his co-conspirators were well aware of prior enforcement action to stop this conduct. Protecting the elderly from brazen predators like the defendants is a priority of this Office and the Department of Justice.”

Lovisa is additionally accused of arranging a sham sale of a Las Vegas house he owned for $155,500 in September 2012 that allowed him to maintain control of it and only give the FTC proceeds of that sale, officials say. He sold the house in April 2015 for $540,000.

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