FBI arrests eight in scheme to steal McDonald's Monopoly game prizes

Wednesday, August 22nd 2001, 12:00 am
By: News On 6

WASHINGTON (AP) _ With the help of McDonald's, the FBI thwarted an alleged $13 million scam to rig customer participation games at the fast-food chain. Authorities said the scam was run by a contractor in charge of distributing winning game pieces.

Eight people were arrested and investigators are looking for more in an alleged criminal ring that fixed $1 million winners of the popular Monopoly and ``Who Wants to be a Millionaire'' games played by millions of McDonald's customers over the past six years.

At the center of the scheme was Jerome Jacobson, 58, a security employee of Simon Marketing Inc., a Los Angeles company hired by McDonald's to handle game promotions and security, authorities said. Jacobson had almost total control over the distribution of winning game pieces, according to a criminal complaint filed in federal court in Jacksonville, Fla.

Simon ``is responsible for insuring the integrity of the games,'' said the complaint.

Consumers should have been able to win the $1 million prizes by collecting game pieces either from drink cups and french fry boxes at McDonald's or from Sunday newspaper inserts.

The complaint alleges that Jacobson embezzled winning game pieces and distributed them to friends and business associates, who found others to take the winning pieces and claim the prizes. In all, the ring ``won'' more than $13 million in prizes.

No McDonald's employees were involved and the company was not aware of the scheme until it was contacted by the FBI in May 2001. The FBI learned of the scheme when a source familiar with the scam came forward, officials said. The FBI would not identify the source.

McDonald's assisted investigators, running a Monopoly game in July that helped the FBI nab a fraudulent $1 million winner.

The complaint describes various ways the fraudulent winners tried to hide that they were not legitimate winners, and shows how investigators, using surveillance and wiretaps, connected recruiters and ``winners'' to Jacobson, a security employee at Simon Marketing in Lawrenceville, Ga.

Jacobson and an accountant from a nationally recognized public accounting firm who monitored the distribution of game pieces were the only two people who had custody of winning pieces after they were printed, the complaint said.

The two were supposed to travel to regional publishers and distribution centers to randomly place winning pieces in packaging materials and inserts.

Instead, Jacobson gave them to recruiters who found people to pose as winners and collect checks from McDonald's, the complaint alleges.

In many instances, the winners allegedly turned over the first $50,000 of their prize money to Jacobson, who was arrested Tuesday in Georgia.

``This fraud scheme denied McDonald's customers a fair and equal chance of winning,'' said Attorney General John Ashcroft. ``Those involved in this type of corruption will find out that breaking the law is no game.''

Jack M. Greenberg, McDonald's chairman and chief executive officer, said, ``Customer confidence is at the very heart of McDonald's business. We're determined that nothing gets between us and our customers, and we're outraged when anyone tries to breach that trust.''

Greenberg said millions of McDonald's customers won free food, cash and other prizes but many of the biggest prizes went to those involved in the scam. To make it up to customers, McDonald's will give away $1 million and $100,000 prizes at randomly selected restaurants.

McDonald's has terminated its contract with Simon Marketing.

Simon Worldwide Inc. of Los Angeles, parent company of Simon Marketing, said in a statement it would ``cooperate fully with both McDonald's and all investigating agencies.''

The statement quoted Simon Worldwide chief executive Allan Brown as saying: ``The more than 400 employees of Simon Worldwide have also been victimized by the alleged actions of one employee, and everyone at our company is determined to do whatever we can to repair our relationship with McDonald's and to maintain our relationships with Simon Worldwide's other clients.''

All eight people arrested were charged with conspiracy to commit mail fraud, and felony complaints were filed against them in federal court in Florida.

After it learned of the scam, the FBI contacted McDonald's, which provided investigators with a list of winners from 1995 to the present. The names matched up with the names provided by the informant, according to the complaint.

Besides Jacobson, those arrested included: Linda L. Baker, 49, of Westminster, S.C.; 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.; and Brenda S. Phenis, 50, of Fair Play, S.C.