60 charged in magazine scam that netted $300M from elderly, vulnerable people

It's being called the largest elder fraud scheme in the country.
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Sixty people have been charged in connection to a magazine telemarketing scam that netted $300 million from more than 150,000 elderly and vulnerable people in the U.S., the U.S. Attorney's Office in Minnesota announced Wednesday. 

The suspects, who are from 14 states, including Minnesota and Canada, are charged with crimes that include conspiracy, wire fraud, mail fraud and violating the Senior Citizens Against Marketing Scams Act of 1994 (the SCAMS Act) in connection to the scam that spanned 20 years, a news release says.

“This case represents the largest elder fraud scheme in the nation. More than 150,000 elderly and vulnerable victims across the United States have been identified in what is essentially a criminal class action,” U.S. Attorney Erica H. MacDonald said in a news release. 

“Unfortunately, we live in a world where fraudsters are willing to take advantage of seniors, who are often trusting and polite," MacDonald added. "It’s my hope that this prosecution is a call for vigilance and caution. Combatting elder fraud and abuse is one of the Justice Department’s top priorities and I applaud our investigative partners for their grit and dedication in tackling, at the systemic level, this widespread fraud.”

The news release, citing allegations made in court documents, says over the past 20 years, a network of dozens of fake magazine sales companies in the U.S. and Canada operated telemarketing call centers in 14 states, including Minnesota, where employees made calls using "deceptive" scripts designed to defraud the victim by inducing them, through a series of lies and misrepresentations, into making large or repeat payments to the companies.

In many of the incidents, the suspects would use a fake "renewal" script in which they'd claim to be calling from the victim's existing magazine subscription company, falsely claiming an offer that would allow them to reduce their subscription price. But instead, the suspects would sign the victims up for new and expensive subscriptions. 

"The effect was that a single consumer went from having one magazine subscription to, at times, more than a dozen, all with different fraudulent magazine companies, each 'sold' under the auspices of 'reducing' the consumer’s monthly rate," the release says. 

The indictment charges company owners who operated these call centers, as well as lead brokers, who bought and sold lead lists of victims to fraudulent magazine sales companies. Many of the victims on the lead lists were elderly and susceptible to these deceptive sales tactics, with each name selling for as much as $10-$15. 

Of the 60 people charged in connection to this case, 15 are from Minnesota. They are charged in an indictment that alleges they used a fake renewal script to defraud more than 125,000 victims out of more than $300 million. 

Those charged from Minnesota are: 

  • David John Moulder, 57, of Prior Lake, is alleged to be the owner and chief executive officer of several Minnesota-based companies that provided an array of services to companies involved in fraudulent magazine sales. He is charged with conspiracy to commit mail fraud, wire fraud, and violating the SCAMS Act. 
  • Barbara Ann Moulder, 55, of Minneapolis, is alleged to be a telemarketer. She is charged with conspiracy to commit mail fraud, mail fraud, wire fraud, and violating the SCAMS Act.
  • Brian James Williams, 41, of Long Lake, is alleged to be the owner and operator of several Minnesota-based companies involved in fraudulent magazine sales. He is charged with conspiracy to commit mail fraud, mail fraud, wire fraud, and violating the SCAMS Act
  • Tashena Lavera Crump, 36, of Minneapolis, is alleged to be a call center manager and telemarketer. Crump is charged with conspiracy to commit mail fraud, wire fraud, and violating the SCAMS Act. 
  • Jared Thomas Michelizzi, 37, of Ramsey, is alleged to be the owner and operator of several Minnesota-based companies involved in fraudulent magazine sales. Michelizzi is charged with conspiracy to commit mail fraud, mail fraud, wire fraud, and violating the SCAMS Act. 
  • Eric Patrick McGarrity, 36, of Minneapolis, is alleged to be a telemarketer. McGarrity is charged with conspiracy to commit mail fraud, mail fraud, wire fraud, and violating the SCAMS Act. 
  • Andrew John Landsem, 34, of Minneapolis, is alleged to be a telemarketer. Landsem is charged with conspiracy to commit mail fraud, mail fraud, wire fraud, and violating the SCAMS Act. 
  • Ballam Hazeakiah Dudley, 34, of Plymouth, is alleged to be a telemarketer. Dudley is charged with conspiracy to commit mail fraud, mail fraud, wire fraud, and violating the SCAMS Act.
  • Monica Sabina Sharma-Hanssen, 52, of Excelsior, is alleged to be the owner and operator of a Minnesota-based company involved in fraudulent magazine sales. Sharma-Hanssen is charged with conspiracy to commit mail fraud, mail fraud, wire fraud, and violating the SCAMS Act. 
  • Timothy Paul Hanssen, 54, of Excelsior, is alleged to be the owner and operator of a Minnesota-based company involved in fraudulent magazine sales. Hanssen is charged with conspiracy to commit mail fraud, mail fraud, wire fraud, and violating the SCAMS Act. 
  • Corlos Kentrell Smith, 41, of St. Louis Park, is alleged to be a telemarketer. Smith is charged with conspiracy to commit mail fraud, mail fraud, wire fraud, and violating the SCAMS Act. 
  • Stacey Leigh Persons, 34, of Andover, is alleged to have owned and operated two Minnesota-based companies involved in fraudulent magazine sales. Persons is charged with conspiracy to commit mail fraud, mail fraud, wire fraud, and violating the SCAMS Act. 
  • Patricia Nichole Shinn 33, of Cambridge, is alleged to be a telemarketer. Shinn is charged with conspiracy to commit mail fraud, wire fraud, and violating the SCAMS Act. 
  • Leeann Garcia, 26, of Cambridge, is alleged to be a telemarketer. Garcia is charged with conspiracy to commit mail fraud, wire fraud, and violating the SCAMS Act. 
  • Eric Stephen Esherick, 37, of Andover, is alleged to be an owner and operator of a Minnesota-based company involved in fraudulent magazine sales. Esherick is charged with conspiracy to commit mail fraud, wire fraud, and violating the SCAMS Act.

Officials believe there may be other victims of this magazine scheme. People are asked to report suspected fraudulent activity to MagazineVictims@fbi.gov or visit FBI.gov/MagazineVictims.

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