Last updated on 2015.02.12
Attorney General Marty Jackley's 2015 legislative package has hit the hopper in the form of Senate Bills 11 through 18. Of particular interest to readers of this blog will be Senate Bill 18, AG Jackley's effort to make really, truly illegal the kind of raffle scam perpetrated by Chad Haber and Annette Bosworth in 2012 and 2013 and uncovered by this blog in November 2013.
SB 18 sets these rules for raffles and lotteries:
No lottery may continue for longer than eighteen months after the date on which the first ticket is sold. If an organization determines that a drawing cannot be held within eighteen months, the organization shall within thirty days notify all purchasers that the lottery cannot be completed or prize awarded, and that each purchaser is entitled to a full refund of the ticket price upon the submission of a request for refund. If a purchaser fails to contact the organization and request a refund within one hundred eighty days after the notice was given, the organization shall within thirty days remit the unclaimed refund amount to the Office of State Treasurer as unclaimed property [Senate Bill 18, South Dakota Legislature, posted 2015.01.07].
But look out! Senate Bill 18 reveals a Channette Loophole in our consumer protection laws. SB 18 adds violations of the above new rules to the list of deceptive acts or practices. But check out the existing penalty clause of that statute:
Each act in violation of this section under one thousand dollars is a Class 1 misdemeanor. Each act in violation of this statute over one thousand dollars but under one hundred thousand dollars is a Class 6 felony. Each act in violation of this section over one hundred thousand dollars is a Class 5 felony [SDCL 37-24-6].
Chad and Annette sold raffle tickets for $1,000 a pop, then failed to draw for the prize or refund buyers (at least not until public scrutiny and the AG's pressure forced them to hand cash back to a few of their marks). Under the above statute, would that have been a Class 1 misdemeanor or a Class 6 felony?
Update 2015.02.12 17:36 CST: The omission of exactly one thousand dollars from the deceptive trade practices statute came from the Attorney General's office just one year ago in its 2014 Senate Bill 23. In testimony on this year's Bosworth-Haber raffle-scam bill, SB 18, Attorney General Jackley said the dollar figure is aggregate, not per ticket, so selling 18 bogus raffle tickets for $1,000 each in violation of SB 18 would constitute a Class 6 felony.