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For immediate release - Wednesday, November 19, 2008.
Contact Bob Brammer -- 515-281-6699.

Miller: Iowans Receiving Refunds from Businesses that Deceived Older Iowans

A.G. alleged Pennsylvania companies operated by Paul Gluchanicz sold names of Iowans who sent $20 “administration fees” thinking they had won huge cash prizes.

Attorney General Tom Miller said Wednesday that checks are in the mail to 82 Iowans who were deceived by a Pennsylvania direct-mail operator into thinking they had won cash prizes worth hundreds of thousands of dollars – and sending $20 “administration” or “registration” fees to collect their prize money.

“People lost their $20 payments because they received nothing more than a list of other sweepstakes and contests,” Miller said. “The mailings were deceptive.”

“But it didn’t stop there,” he said. “These companies collected and sold lists of the persons who responded to the deceptive solicitations. Such lists would be invaluable to other questionable prize promoters or telemarketers planning to prey on vulnerable older Iowans.”

Miller’s office filed a consumer fraud law suit last May naming Paul Gluchanicz of Wayne, PA, near Philadelphia. Gluchanicz did business as “Sweepstakes Research Legal Dept.,” “Asset Allocation Authority,” “American Award Advisory,” and others. [Go to the AG’s lawsuit.]

Polk County District Court Judge Michael Huppert recently ordered Gluchanicz to make full refunds to all Iowans who paid the “fees.” Miller said checks ranging from $20 to $120 were sent Wednesday by the AG’s Office to 82 Iowans. (Some Iowans paid the “fees” several times.) [Go to the Court’s order.]

The Court also ordered Gluchanicz to pay $8,000 to the State of Iowa, prohibited him from using any deceptive mailings in Iowa, specifically prohibited him from marketing sweepstakes “information” to Iowans, and prohibited him from selling the names or other information obtained about Iowans. Judge Huppert also ordered that any violations of the order would make Gluchanicz liable for a $40,000 penalty.

In agreeing to settle the dispute through a Consent Judgment, Gluchanicz denied wrongdoing or liability of any kind.

Miller cautioned consumers to be wary of questionable prize and sweepstakes schemes. “Be highly skeptical if someone claims you have won a huge prize,” he said. “Don’t send money to collect any so-called prize. And don’t purchase magazines or merchandise thinking it will make you more likely to win a sweepstakes prize.”

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More background and detail:

Paul Gluchanicz conducted business through such companies and “DBAs” as Sweepstakes Research Legal Department, Asset Allocation Authority, American Award Advisory, Keystone Associates, Inc., Solaris Direct, Inc., American Prize Publications, APP, Win America, American Sweeps Registry, Universal Consulting Services, Inc., Zodiac Direct, Inc., Paragon Direct Marketing, Inc, Paragon Astrology, Inc., and probably others.

The Attorney General’s lawsuit alleged that Gluchanicz sent out deceptive mass mailings to Iowans, especially older Iowans, intending to trick them into thinking they were winning as much as $950,000 in a sweepstakes.

The lawsuit, which was filed May 16, 2008, alleged that Gluchanicz’s mailings were sent in envelopes with such return addresses as “Payer Office, Asset Allocation Authority,” and bore such headings as “Payout Confirmation Notice” and “Official Notification.” Miller said the mailings used terms that implied that the sender had been looking for the consumer – like “found,” “track,” “trace” and “recipient identified” -- and terms that insinuated that the recipient had already won a big prize – like “claimant” and “official notification.”

Gluchanicz signed the mailings using titles such as “Prize Notification Director,” “Dispatch Officer, Audit Control Division” and “Legal Department Adjutant,” the suit said.

“In fact, Iowans who took the bait and sent in the requested $20 ‘administration fee’ received only a sweepstakes newsletter -- and their names were added to a rental list of susceptible consumers destined to be used by other questionable telemarketers or direct-mailers,” Miller said.

“It’s bad enough when many older Iowans are made to think they’ve won a big prize when they haven’t, and it’s worse for them to be tricked into making payments,” Miller said.

“But worst of all is that Iowans were tricked into identifying themselves as vulnerable to prize schemes, and their names ended up on lists that exposed them to further exploitation.”

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