U.S. accuses R.I. trio of $10M scam

PROVIDENCE — A federal judge on Tuesday issued an order barring a Providence businessman, his wife and a third associate from using the U.S. Postal Service to target elderly people in what authorities say is an elaborate sweepstakes-mailing scheme that scammed more than $10 million from vulnerable people.

At the request of federal prosecutors, U.S. District Court Chief Judge William E. Smith issued a temporary restraining order Tuesday against Michael Shine and his wife, Meagan Shine, 42, both of Warwick, and Melissa Pinelli, of Cranston. Prosecutors allege that they have engaged since 2011 in a predatory mail-fraud scheme that persuaded largely vulnerable people to send in more than $10 million in supposed processing fees to collect promised cash prizes, luxury prizes and other winnings that they never received.

Michael Shine, 48, owns Tammany Hall Pub & Parlor, at 409 Atwells Ave., on Federal Hill in Providence. Property records show that the couple own a home at 35 Westford Ave., on Warwick Neck.

The companies that authorities say they owned and operated that sent out the deceptive mailings include Lucky Dog, doing business as Premium Ops & Incentives, and Destiny Merchandise LLC, doing business as Independent Catalog Services. Catalog Services is owned by the Shines, according to court documents, while Pinelli owned Premier Caging Services, which collected the payments and deposited it to various accounts.

The investigation by Postal Service agents, working with federal prosecutors, revealed that sweepstakes solicitations were mailed in 41 states in which individuals were misled into believing that had been personally selected to receive huge sums of money or extravagant items, such as jewelry, authorities say. The people, an estimated 50,000 each year, were instructed each time to send in $20 or $30 in order to collect their winnings, and the payments were mailed to post-office boxes in Providence, prosecutors said.

Investigators said they observed Pinelli entering the Providence Main Office at 24 Corliss St., where she retrieved mail and took it to 411 Atwells Ave., a building owned by Michael Shine that bears a sign reading On-Site Service Corp., Lucky Dog LLC, 409 Atwells Ave LLC. Prosecutors put the total losses at more than $10.5 million.

A complaint filed in U.S. District Court on Tuesday indicates that the entities involved in the alleged scheme came onto the federal radar during the investigating a Canadian payment processing service that authorities labeled a "transactional criminal organization." The government prohibited U.S. residents from engaging in transactions with the company.

The complaint alleges that Michael Shine then changed the managing agent of Lucky Dog into his wife's name and incorporated Destiny Merchandising to continue to send out direct mailings.

The complaint describes how unnamed alleged victims from throughout the nation, ages 68 to 85, sent sums of money in response to solicitations directing them to pay processing fees in order to collect millions of dollars in winnings. Their payments ranged from a total of $119 to $2,825 from an 85-year-old woman in Arizona, according to the complaint.

The solicitations were designed to look legitimate, with disclaimers written discretely in fine print, sometimes on the back of a mailing, authorities say.

A phone call placed to Tammany Hall was not immediately returned Tuesday. Federal agents were seen Tuesday at the Federal Hill establishment.