Tuesday, September 11, 2001

A federal grand jury in Florida yesterday indicted 21 persons on charges of mail fraud in a nationwide conspiracy to defraud the McDonald’s Corp. and its customers of $20 million by rigging the fast-food firm’s promotional prize contests.

The indictment, handed up in U.S. District Court in Jacksonville, Fla., targeted Jerome P. Jacobson, director of security for Simon Marketing Inc., and others in a suspected embezzlement scheme involving high-value winning McDonald’s promotional game pieces dating back to the 1980s.

Mr. Jacobson, 58, was among eight persons arrested last month by the FBI as part of an ongoing FBI investigation known as “Operation Final Answer.” Additional suspects were identified as the probe continued.

As head of the firm responsible for overseeing game security, Mr. Jacobson was charged with fixing the outcome of the McDonald’s games by controlling the distribution of the high-value prize pieces, such as the $1 million grand prize.

The rigged games included “Monopoly at McDonald’s,” “Hatch, Match, and Win,” “When the USA Wins, You Win,” “The Deluxe Monopoly Game,” “The Monopoly and More Game at McDonald’s,” “Disney’s Masterpiece Collection Trivia Challenge at McDonald’s,” “Who Wants to be a Millionaire Game,” “Win on the Spot” and “Pick Your Prize Monopoly.”

No McDonald’s employees or company officials were implicated in the scheme. Federal authorities, including Attorney General John Ashcroft, have described McDonald’s and its CEO, Jack Greenberg, as “model corporate citizens” who helped in the FBI probe.

The indictment accuses Mr. Jacobson of distributing winning game pieces to individuals who personally redeemed them, and of working through others who recruited friends, relatives and associates to fraudulently represent themselves as having legitimately won the high-value winning McDonald’s promotional game pieces.

Simon Marketing is headquartered in Los Angeles and has offices in Atlanta, where Mr. Jacobson worked. The firm held a longtime contract from McDonald’s to administer its promotional games.

The investigation was initiated by FBI agents at the Jacksonville field office, but ultimately included bureau field offices throughout the United States.

The FBI said 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.

Court-authorized wiretaps targeted a number of the suspected co-conspirators, authorities said. The monitored conversations revealed cover stories, concealment schemes and fraudulent addresses. They also included discussions about income tax consequences, recruitment problems, money-distribution schemes and even discussions about how to pressure McDonald’s to pay the winnings faster, authorities said.

The maximum penalty for a single count of conspiracy to commit mail fraud, if convicted, is five years imprisonment, a $250,000 fine and restitution.

Among the prizes the government wants returned are a 1989 Mercedes Roadster, a 1995 Ford F350 pickup, a 1997 Isuzu Rodeo, a 1997 Lexus ES300, a 1998 Chevrolet Corvette, a 2000 Honda S2000 and a 2001 Toyota Highlander.

In addition to Mr. Jacobson, those named in the indictment were Robin Lisa Colombo, 40, William R. Fisher, 62, Gloria Brown, 43, Andrew M. Glomb, 58, James P. Faherty, 40, Earl Stuart, 67, and Marvin Braun, 58, all of Florida; Stacy L. Breegle, 37, and Jerry Lee Kenny, 42, both of Virginia; and George Chandler, 29, Ronald E. Hughey, 56, Linda Baker, 48, Noah Dwight Baker Sr., 49, and Brenda S. Phenis, 50, all of South Carolina.

Also, Wiley R. Couturier, 59, of Georgia; John F. Davis, 44, of Texas; Michael L. Hoover, 56, of Rhode Island; Victor E. Marchitello, 52, of Pennsylvania; Steven L. Sinder, 55, of New York; and Stanley Warwick, 69, of Illinois.

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