A Toronto man who sent out millions of fraudulent direct mail promotions has pleaded guilty to offences under the Competition Act and will have to pay a fine of $2 million.

David Stucky, 57, filed his plea with Ontario Superior Court on Friday. The record fine amounts to double the revenue he received from running a fraudulent lottery-ticket reselling scheme, the Competition Bureau of Canada said on Monday.

Between August 1997 and March 1999, Stucky sent out millions of unsolicited mailings selling group shares of Super 7 lottery tickets. The scam was promoted under the name "Canadian Lottery Buyers Association," said the bureau.

The promotion, targeted at people in the United States, Australia and New Zealand, led recipients to believe they could win tens of millions of dollars. But in that 1½-year period, respondents only won an average of 75 cents, the Competition Bureau said.

Stucky sent out 3.1 million mailings and received $1 million in revenue.

2nd sweepstakes scam

Stucky also faces 18 months of probation and a suspended sentence for his involvement in a separate scheme that marketed a sweepstakes offer under the name "Canadian Equity Funding." The mailings, sent between August 1997 and March 1999, informed the recipients they may be in line to win a $5,000 cash prize or some other valuable award.

People were required to send a processing fee of $14.95 to $29.95 US to receive their prize. Every person got a predetermined prize, which in most cases was cheap jewelry.

Stucky will also have to donate $100,000 to charity, and is barred from engaging in any mass marketing for 10 years for his role in the sweepstakes promotion, which targeted people in over 200 countries.

Both scams were based out of the Toronto area, but enforcement agencies in Canada, the United Kingdom, the United States, Australia and New Zealand all played a role in the prosecution, the Competition Bureau said. Stucky was convicted under the criminal deceptive mass marketing provisions of the Competition Act.