Toronto Man Fined $2 Million For Mailing Fake Promotions

A Toronto man who sent out millions of deceptive direct mail promotions to consumers has pleaded guilty to offenses under the Competition Act and will pay $2 million. The fine is double the amount of the revenue he received from his activities, according to The Competition Bureau, an independent Canadian law enforcement agency.

David Stucky was fined for promoting a lottery ticket reselling scheme under the name Canadian Lottery Buyers Association. Stucky was also placed on probation for 18 months and received a suspended sentence for his involvement in a separate deceptive scheme, a sweepstakes look-alike offer marketed under the name Canadian Equity Funding.

During his probation, Stucky will donate $100,000 to charity. Mr. Stucky is also prohibited from engaging in any form of mass marketing for 10 years, and must file an affidavit with the Bureau stating his occupation once a year for five years.

The lottery promotion, which sold group shares of Super 7 lottery tickets, gave consumers the misleading impression that they could win tens of millions of dollars. However, in a period of just over a year and a half, consumers actually won an average of 75 cents, according to The Competition Bureau. Stucky mailed out approximately 3.1 million copies of the lottery promotion and received approximately $1 million in revenue.

The sweepstakes look-alike offer gave recipients the false impression that they were to receive a cash prize of about $5,000 or another valuable prize on payment of a modest processing fee. According to The Competition Bureau, most purchasers received a predetermined prize of an inexpensive piece of costume jewelry.

Both promotions were based out of the Toronto area, but targeted customers outside of Canada.

The lottery promotion was marketed to residents of the United States, Australia and New Zealand, while the sweepstakes promotion was sent to consumers in more than 200 countries. Enforcement agencies in Canada, the United Kingdom, the United States, Australia and New Zealand all played a role in this prosecution, carried out by the Public Prosecution Service of Canada. Stucky was convicted under the criminal deceptive mass marketing provisions of the Competition Act.