- The Washington Times - Wednesday, August 22, 2001

The FBI yesterday arrested eight persons in a suspected nationwide scheme to defraud McDonald's Corp. and its customers of $13 million in the restaurant's "Monopoly" and "Who Wants to be a Millionaire" prize games.
In a complaint filed in U.S. District Court in Florida, the eight — including officials at a company responsible for overseeing game security — were charged with fixing the outcome of the games by controlling the distribution of high-value prize pieces, such as the $1 million grand prize.
Attorney General John Ashcroft, in announcing the arrests, said the scheme denied McDonald's customers a "fair and equal chance of winning."
"We want those involved in this type of corruption to know that breaking the law is not a game," Mr. Ashcroft said in a press conference at FBI headquarters, adding that officials at McDonald's had "cooperated fully in this ongoing investigation, and that cooperation has helped make today's arrests possible."
No McDonald's employees or officials were implicated in the scheme, and acting FBI Director Tom Pickard described the firm and its CEO, Jack Greenberg, as "model corporate citizens" who helped in the FBI probe.
Those arrested as part of the ongoing probe, Operation Final Answer, were Linda L. Baker, 49, and Noah D. "Dwight" Baker, 49, of Westminster, S.C.; John F. Davis, 44, of Granbury, Texas; Andrew M. Glomb, 58, of Fort Lauderdale, Fla.; Michael L. Hoover, 56, of Westerly, R.I.; Ronald E. Hughey, 56, of Anderson, S.C.; Jerome P. Jacobson, 58, of Lawrenceville, Ga.; and Brenda S. Phenis, 50, of Fair Play, S.C.
Each person faces five years in prison and $250,000 in fines on a charge of conspiracy to commit mail fraud.
The FBI said the scheme began as early as 1995 and involved the Los Angeles firm Simon Marketing Inc., which was contracted by McDonald's to oversee the restaurant chain's promotional games.
Mr. Ashcroft said that after game pieces were produced, they were supposed to be legitimately distributed to provide customers a random chance of winning. But, he said, Mr. Jacobson, an employee in Simon's Georgia office, embezzled the winning high-value game pieces.
The complaint accused Mr. Jacobson of providing those game pieces to his friends and associates, who acted as recruiters. The recruiters then solicited others, who claimed to be the legitimate winners of the McDonald's game.
Mr. Ashcroft said that after "these so-called winners" received their prize checks, they shared a portion of the proceeds with their recruiters, who in turn provided a portion to Mr. Jacobson. He said more than $13 million worth of grand prizes were claimed by the co-conspirators.
Mr. Pickard said the FBI investigation began when a person came forward and "roughly described a conspiracy" involving the fraudulent redeeming of prizes in McDonald's contests.
"As the complaint alleges, this source outlined a complex pattern of recruitments, schemes and kickbacks involving millions in supposed winnings," he said. "Through a variety of schemes, someone was selling the high-dollar winning pieces. As the complaint states, with the help of McDonald's, the source information was substantially corroborated.
"We then were able to identify the people described by the source, how the schemes were likely perpetrated, and how the connections fit together," he said.
Mr. Pickard said FBI agents identified Mr. Jacobson as the central figure in the distribution of the game pieces, adding that many of the winners were from the same family or were closely related.
"All appeared connected in some fashion, even though a variety of tricks were used to conceal their relationships and their locations," he said.
Mr. Pickard said that court-authorized wiretaps targeted a number of the suspected co-conspirators.
"Conversations revealed cover stories, concealment schemes and fraudulent addresses. As the complaint alleges, there were conversations about tax consequences, recruitment problems, money distribution schemes and even discussions about how to pressure McDonald's to pay the winnings faster," he said.


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