LV man pleads Fifth in probe

Cassandra Burrell

Wednesday, July 21, 1999 | 12:41 p.m.

WASHINGTON -- Some small sweepstakes companies that are running their businesses within the letter of the law nevertheless are taking in millions of dollars by misleading consumers into buying questionable products, senators say.

"It's more apparent than ever that something must be done," Sen. Susan Collins, R-Maine, told operators of two sweepstakes companies who appeared before a Senate subcommittee Tuesday.

"Changes are going to be made here," Sen. Richard Durbin, D-Ill., said, referring to legislation that would toughen laws regulating sweepstakes. The Senate Governmental Affairs Committee approved the bill, sponsored by Collins, in May and it now awaits a vote by the full Senate.

During a hearing before the committee's permanent subcommittee on investigations, the company officials explained how they operated and denied that their mail solicitations are misleading.

David Dobin, president of Lone Star Promotions Inc. of Merrick, N.Y., said he takes care to stay within the law.

"I don't know how anyone can complain that Lone Star unfairly enticed them to purchase something they didn't want," Dobin said. "We clearly explain what it is we are selling."

Dobin has pleaded guilty to a charge of conspiracy to commit mail fraud involving another company.

Anthony Kasday, president of Neopolitan Consultants Inc. of Las Vegas, cited his Fifth Amendment right against self-incrimination and declined twice to answer questions sharply delivered by Collins.

Kasday would not explain why an artists' rendering of a seal on a sweepstakes promotion, followed by the words "J. Remington Astor, Prize Registrar, My appt. exp. Aug. 29, 2000" appears to closely resemble the seal of a notary public stamp on another page.

No one named "J. Remington Astor" actually exists, he said. He also declined to explain why he was not troubled by the possibility that the artists' seal would mislead people to believe it conferred legal status on the promotion.

Under Collins' bill, sweepstakes that use deception to lure people into buying magazine subscriptions or other products by mail could be fined up to $2 million. It is designed to curb sweepstakes that may be in compliance with the letter of law but dupe people into thinking they can improve their chances of winning by buying the company's products.

Sweepstakes offers also would be required to state accurately the value of prizes offered, the odds of winning and the name of the sponsor.

Collins said most people are familiar with the giant sweepstakes promotions offered by Publishers Clearing House and American Family Publishers. But little is known about smaller companies, which sent out an estimated 100 million sweepstakes offers last year.