Feds announce indictments in phony magazine elder fraud case

The U.S. Attorney’s Office in Minnesota announced the indictment of 60 people accused of defrauding tens of thousands of mostly elderly victims out of $200 million in fraudulent magazine subscriptions.

(FOX 9) - The U.S. Attorney’s Office in Minnesota announced the indictment of 60 people accused of defrauding tens of thousands of mostly elderly victims out of $200 million in fraudulent magazine subscriptions.

According to court documents obtained by FOX 9, the nationwide telemarketing fraud scheme targeted tens of thousands of elderly and other vulnerable people across the country. It was thwarted by federal law enforcement after a months-long undercover operation.

The call centers, a handful of which have Minnesota addresses, would use phony scripts to induce victims into making large or repeat payments to them in exchange for reducing the victim’s monthly cost of an existing subscription or offering a cancellation lump-sum payment to get the victim out of other payments. The call centers did not have any legitimate relationships with the magazine companies.

Wednesday morning, the U.S. Attorney from Minneapolis Erica H. MacDonald, FBI Special Agent in Charge Michael Paul and USPIS Inspector in Charge Ruth Mendonca held a press conference announcing the indictments in what they say is the nation’s largest elder fraud case.

The more than two-dozen companies involved in the fraudulent magazine sales scheme are located in Minnesota, Florida, New York, Georgia, Arizona, California, Missouri and Kansas as well as Canada and Panama. As part of the scheme, they would share potential victim information between companies.

Feds announce indictments in phony magazine elder fraud case

THE VICTIMS

Court documents showed one victim was a 78-year-old woman who was paying $1,402 on magazines per year because of these companies’ predatory practices.

Another was a developmentally delayed vulnerable adult whose family said she was deceived and then threatened by the call centers with “drastic action” if they did not accept the caller’s terms.

A New Jersey man who cooperated with the FBI on the case said he was charged approximately $1,350 in one month by seven different magazine companies.

UNDERCOVER OPERATION

Federal agents launched an undercover investigation by creating handwritten lead sheets that contained a mix of names and phone numbers assigned to undercover agents and law enforcement personnel. Law enforcement recorded the calls.

Employees on the calls lied to the agents and then charged their credit cards, therefore committing fraud while being recorded.

By January 2020, agents had received and recorded more than 400 calls from magazine companies across the country as the phony lead sheets were passed around.

More than 20 companies were found to be involved in the scheme.

MINNESOTA CONNECTIONS

According to a search warrant filed in February in the case, a number of Minnesota companies were involved in the scheme. They are: