On September 30, 2002, the FTC filed a lawsuit charging that a group of related companies operated by six Canadians was running telemarketing boiler rooms targeting seniors in an illegal foreign lottery scheme. The FTC alleged that the telemarketers told the consumers that by investing with them, the consumers had a very good chance of winning the Canadian lottery. According to the FTC, the telemarketers told many consumers that it is legal for U.S. consumers to buy Canadian lottery tickets. They told some consumers that they had already won a large prize and that consumers should send them money to redeem their winnings. The agency charged them with violating the FTC Act and the Telemarketing Sales Rule.

On October 1, 2002, U. S. District Court Judge Amy St. Eve issued a temporary restraining order. Eleven of the 14 defendants agreed to abide by the provisions of the temporary restraining order, pending trial. In December 2002, the court granted a preliminary injunction halting the operation. At the request of the Federal Trade Commission, the court temporarily barred the defendants from selling tickets, chances, or any foreign lottery chances to residents of the United States; barred deceptive claims about the chances of winning the Canadian lottery; prohibited misrepresentations or omissions about material facts; and ordered an asset freeze to preserve funds for consumer redress, pending trial.

On July 29, 2004, the court ruled that the defendants made false or misleading statements to induce consumers to purchase shares or interests in lottery tickets, including that it is illegal for them to sell to foreign lottery tickets and for consumers to purchase them. The $19 million will not be distributed until all possible appeals have been exhausted.