B.C. man ordered extradited to U.S. to face fraud charges over $13-million fake sweepstakes

A B.C. man accused of bilking thousands of mainly seniors worldwide of US$13 million through a fake sweepstakes scheme has moved a step closer to extradition to the U.S. to face fraud charges.

A B.C. Supreme Court judge granted a federal Justice Derpatment application for committal for Alexander Quaglia on Dec. 1 in a decision released on Tuesday.

Quaglia was immediately ordered into custody to await surrender to the U.S. under Canada’s Extradition Act.

But Justice Kevin Loo told Quaglia he wouldn’t be handed over until expiry of the 30-day appeal period and that he could apply for bail.

That same day, Quaglia filed an appeal in the B.C. Court of Appeal and applied for and was granted bail, according to the Appeal Court registry.

A hearing date for the appeal has yet to be scheduled.

The U.S. is seeking Quaglia’s extradition to face a charge similar to the Canadian offence of fraud under the Canadian Criminal Code, according to the decision.

Quaglia operated a B.C.-based mass-mailing scheme targeting seniors around the world, including in the U.S., offering fraudulent prizes of US$1 million in exchange for payments sent to entities controlled by Quaglia, according to the record of the case Loo included in his reasons.

“Between 2011 and 2016, Mr. Quaglia generated more than $13 million US in revenue through this scheme,” he wrote.

The U.S. Justice Department announced in September 2020 it had charged Quaglia, another Canadian and two Americans for defrauding “thousands of elderly and vulnerable victims,” according to a release at the time.

The charges were part of the Justice Department’s 2020 elder fraud sweep, and the U.S. Postal Inspection Service said, “While the perpetrators attempt to hide their involvement around the corner or around the globe,” it was committed “to protect our older Americans … (and) would not stop until the scourge of elder fraud is defeated.”

In his judgment, Loo determined there was evidence that had the alleged fraud occurred in Canada, the accused would be committed for trial.

“The test for committal does not require that guilt be the only possible inference that can be drawn from the evidence. It need only be a reasonable inference,” he wrote.

The record of the case cites evidence of several witnesses, including three ex-employees of Quaglia’s company, called Navigator. Former general manager Andrew Thomas is expected to testify that the solicitations mailed out were intended to deceive and the prize was typically US$1 million US. And instead of a prize, recipients who returned the small fee of US$19.95 to 39.95 were sent a booklet listing various sweepstakes they could enter.

Another employee’s evidence was that Quaglia arranged for mail that was sent to U.S. mailboxes to be shipped to Wyoming, Buffalo, then New York, and ultimately to Toronto or Vancouver, according to the judgment.

In his defence, Quaglia argued the evidence wasn’t properly sourced, it contained objectionable opinion and the mailed solicitations weren’t before the court and therefore the court can’t determine if the witnesses are providing accurate interpretations, calling that a “fatal flaw” to the prosecutor’s case.

Loo dismissed that argument.

“There is evidence upon which a reasonable jury properly instructed could return a verdict of guilty against Mr. Quaglia in respect of the offence of fraud” based on the expected evidence, he wrote.

Evidence also showed that Quaglia was in charge of Navigator and that he “profited substantially” from it, he said.

Charged with mail fraud and conspiracy to commit mail fraud along with Quaglia on Aug. 5, 2020, in Nevada, was Patrick Fraser, also of Canada.

Two Americans, Sean Novis, 50, and Gary Denkberg, 57, both of Long Island, N.Y., were charged in a separate indictment in New York state on similar charges for “running a fraudulent mass-mailing scheme that tricked thousands of consumers into paying fee for falsely promoted prizes.”

Each of the charges carries a maximum sentence of 20 years plus a US$250,000 fine, or twice the gross gain or loss from the offence, it said.

None of the allegations have been proven in court.

slazaruk@postmedia.com

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