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FBI Arrests Eight in Scheme Defrauding McDonald's Monopoly Game

Aired August 21, 2001 - 14:33   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU WATERS, CNN ANCHOR: Another story coming together this afternoon involves eight people who work for a company called Simon Manufacturing who have been implicated -- Simon Marketing, excuse me, a company hired by McDonald's to run its Monopoly game, they are implicated in an alleged scheme to rig that game. There has been a news conference at the Justice Department about all of this.

And CNN's justice correspondent Kelli Arena is here to fill us in -- Kelli.

KELLI ARENA, CNN CORRESPONDENT: Lou, the Department of Justice and the FBI did announce the arrest of eight people. Not all of those people though were employees of Simon Marketing, which is a firm that McDonald's contracted to handle its Monopoly and other contests.

The attorney general said that this scheme dates back to 1995. He just finished up a press conference a short time ago. Let's here a little bit of what he had to say.

(BEGIN VIDEO CLIP)

JOHN ASHCROFT, ATTORNEY GENERAL: This morning, the agents of the Federal Bureau of Investigation arrested eight individuals in several states for their involvement in a nationwide scheme to defraud McDonald's corporation and its customers by fraudulently manipulating McDonald's promotional prize contests.

In a complaint filed in the U.S. District Court for the middle district of Florida, these individuals are charged with fixing the outcome of several of McDonald's contests by controlling the distribution of high-value prize pieces, such as $1 million grand prize pieces.

Many Americans are familiar with these contests: Monopoly, Who Wants To Be A Millionaire, and other promotional games.

Arrests were made today in Florida, Georgia, Indiana, Wisconsin, South Carolina and Texas as part of an ongoing nationwide investigation called "Operation Final Answer."

Those arrested today are Linda L. Baker of Westminster, South Carolina; Noah D. Dwight Baker, also of Westminster, South Carolina; John F. Davis, of Granbury, Texas; Andrew M. Glum (ph) of Fort Lauderdale, Florida; Michael L. Hoover, of Westerly, Rhode Island; Ronald E. Huey (ph), of Anderson, South Carolina; Jerome P. Jacobson (ph), of Lawrenceville, Georgia; and Brenda S. Fennis (ph), of Fair Play, South Carolina.

All of these individuals are charged with conspiracy to commit mail fraud.

This scheme began as early as 1995 and this is how it took place: Simon Marketing Incorporated was contracted by McDonald's to administer McDonald's promotional games. After game pieces were produced, they were supposed to be legitimately distributed to provide customers a random chance of winning.

However, the government is charging that a Simon employee, Jerome Jacobson, embezzled the winning high-value game pieces and conspired to have individuals fraudulently claim to be the winners.

The complaint allegations that Jacobson provided the winning game pieces to his friends and associates who acted as recruiters. These recruiters then solicited others who falsely and fraudulently represented that they were the legitimate winners of McDonald's' game.

After so-called winners received their prize checks, they shared a portion of the proceeds with their recruiters, who in turn provided a portion of the proceeds to Jacobson.

More than $13 million worth of grand prizes have been corruptly won by the coconspirators in the scheme.

As you can see, this fraud scheme denied McDonald's' customer 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.

(END VIDEO CLIP)

ARENA: CNN did contact Simon Marketing, which had no comment. We also contacted McDonald's Corporation; the company stresses that no one from McDonald's was involved. It says in a statement that: "McDonald's was victimized by a long time supplier in a sophisticated inside game of fraud and deception. Protecting our customers interests has been our goal since the investigation began. We are delighted with today's arrests."

Now Operation Final Answer, Lou, is still underway, and FBI sources tell us that they do anticipate more arrests being made.

WATERS: Do we have any indication of how McDonald's would expect to handle this from here on out with its customers?

ARENA: Mcdonald's was asked not to give too many details until the Justice Department press conference was over, and so we are trying to contact them now to find out what the next step will be for customers.

WATERS: OK, I'm a little bit ahead of myself then.

Kelli Arena at the Justice Department.

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