Criminals in Canada have ripped off Americans using an Australian lottery as a front.

The con artists sent congratulatory letters to their victims saying they had won more than $500,000 in the "Oz 6/45" lottery draw, and asked them to send a cheque to cover legal fees.

Despite having never entered the lottery - it does not exist - about 50 Americans fell for the scam.

Cash and cheques for thousands of dollars were sent from America to a Sydney address. One envelope contained more than $3300 in cash.

Tipped off by consumer complaints, NSW Office of Fair Trading investigators tracked the contact details to toll-free telephone lines in Canada.

They intercepted the letters and returned the money, receiving mixed responses.

"Some of the people had already realised they had been conned and were very happy to get the money back," a Fair Trading spokeswoman said. "Others were angry because they were expecting their money and thought it still might come."

The Office of Fair Trading is working with its Canadian counterpart to track down the perpetrators.

NSW Fair Trading Minister Reba Meagher said the scam was particularly effective because it claimed to be from official lottery agents Oz Lotto and Lotto Strike, and used their official logos.

The use of an Australian mailbox maintained the illusion of legitimacy.

"Every year there are millions of letters sent from con artists trying to lure consumers with false promises of wealth," Ms Meagher said.

Australia has recently become a prime target for Canadian cons.

In 2003, more than 20,000 scam letters from the country were destroyed after a NSW Supreme Court decision. The letters, attached to a fake cheque, promised a cash windfall of $13,000 provided the consumer sent $49.95 first.

In 2001, the Supreme Court crushed another Canadian venture.

The scammers offered clairvoyants' reports and bogus lottery winnings - but asked for fees of up to $30 up front.

Fair Trading was authorised to return 5500 cheques and credit card payments, totalling about $150,000, to NSW consumers.

The Fair Trading spokeswoman said Australians, who were known around the world for their love of gambling, were also susceptible to overseas lottery scams.

"There have been similar scams in Australia recently using genuine Spanish lotteries as a cover," the spokeswoman said.

Ms Meagher said foreign lotteries were illegal in Australia and common sense was needed to avoid being fleeced. "The simple truth is you can't win a lottery you haven't entered," she said.

The spokeswoman said that the fake lotto mail was routed through six addresses and was one of the more clever lottery cons.

"They are fairly common but this one was more ingenious because they asked for the legal fees," she said.

"It's rare to get thousands in cash being sent to people like that

Sad, but at some point we have to use our brains. Yeah, we just have to.

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MS MVP Security 2006-2008