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Postal Inspectors Investigating Fund-Raising Campaign

November 18, 1988

WASHINGTON (AP) _ Postal inspectors are investigating complaints from people who say they thought they had won a $5,000 cash prize from a cancer research group only to find they received a dime in return for a donation.

″We are in the fact-gathering stage at this point,″ Tom McClure of the U.S. Postal Inspection Service said today.

Watson and Hughey Co., a direct-mail firm in Alexandria, Va., sent letters soliciting participation in a fund-raising campaign on behalf of three cancer research organizations.

The Washington Post said one state official estimated the solicitation went to 48 million households in the country but Jerry Watson, a partner in Watson and Hughey, said that number is exaggerated.

″Our company designs maybe a hundred different sweepstakes a year,″ he said, ″and together the mailings don’t add to that number.″

Watson said his company is only an advertising agency and has all copy for sweepstakes - including the one involved - checked by lawyers. ″I’m not sure what the problem is,″ he said.

The letters state that the recipient has ″won a cash prize in the $5,000 Sweepstakes″ and ask for a voluntary contribution of $5, but closer reading reveals that the total value of the contest is $5,000, with a maximum individual award of $100 and a minimum of 10 cents.

″We have complaints where individuals have sent money in, made contributions and received back a dime prize,″ McClure said.

Asked whether anyone had received a $100 award, McClure said ″when people get that kind of money back, they usually don’t complain.″

He said a dime prize falls into a gray area of the law, since it is a cash award.

The Post said the letters were signed by Washington attorney Robert R. Stone and sent on behalf of the Pacific West Cancer Fund of Seattle, the Knoxville, Tenn.-based Cancer Fund of America and the Walker Cancer Research Institute of Edgewood, Md.

The Maryland secretary of state notified the Cancer Fund of America and Walker Cancer Research Institute on Nov. 10 that suspension of their charity registration is being considered, said Susan Ellson, a lawyer in the office. They have 30 days to respond.

″We have had numerous complaints from Maryland residents,″ she said. Pacific West has filed an application for registration that has not yet been granted, she said.

Efforts to reach Stone by telephone were unsuccessful; his line was being checked for trouble, according to a recorded announcement.

The Post quoted Stone as saying the solicitation was a legitimate fund- raising effort for worthwhile organizations and that he thought the letter was clear.

The Post said the mailings have prompted calls to consumer and legal agencies from people believing they had won $5,000, lawsuits alleging consumer fraud in Missouri and Illinois, consumer warnings in other states and investigations in Virginia and by the federal government.

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