Big Prize Contests Rigged by Marketers, U.S. Alleges

The advertisements promised everything from a $1-million grand prize to a new Corvette for customers who signed up for Alpha Beta’s “California Dreamin’ ” contest, or Taco Bell’s “Wheels, Reels and Meals” sweepstakes.

But the winners sometimes were not customers at all. Some were friends and relatives of the New Jersey marketing executives who ran the two high-stakes contests and a number of others across the country, a federal investigation has disclosed.

C & K Marketing’s president, John Edward Curtin III, and vice president, Kevin Joseph Kissane, were indicted Tuesday by a federal grand jury in Los Angeles, along with three others, in a prize-rigging scam that authorities said funneled thousands of dollars in winnings into C & K’s coffers.

According to the indictment, C & K officials secretly arranged for some of the winning tickets in the two contests, both advertised on national television and in newspapers across the country, to go to friends or relatives.

In some cases, friends acted as “paper winners,” pretending to receive the contest proceeds when the winnings were actually pocketed by C & K, federal prosecutors allege.

In one case, James Lee--a Navy aircraft mechanic from San Diego, who is a friend of Curtin’s brother--received a new $14,000 Mustang convertible in an Alpha Beta contest in the spring of 1985, the indictment alleges. His picture appeared in a local newspaper celebrating the victory.

About a year later, Lee was listed as the grand prize winner of a new $28,500 Corvette in a Taco Bell contest. Lee opted for $28,500 in cash, but never really received any of the winnings, agreeing to be listed as a paper winner and allowing C & K to keep the money, the indictment states.

In the same contest, the indictment alleges, Curtin and Kissane arranged for one of Kissane’s relatives, Jerome Baratta, a New Jersey car dealer, to win the $25,000 second prize. That money was also pocketed by C & K, the indictment alleges.

“So far as we’ve been able to determine, all the other prizes were legitimately awarded. But you have to take into account that we don’t necessarily have perfect information,” said Assistant U.S. Atty. David Katz, who is prosecuting the case.

Stealing Dreams

Katz compared the evidence of prize-rigging to “fixing an election. It’s reprehensible to rig a contest like this, because people have such dreams of winning, and it’s almost like stealing their dreams,” he said.

C & K, an Englewood Cliffs, N.J., company that did $9 million in sales last year, has also organized major sweepstakes for such companies as McDonald’s, Wendy’s, Burger King, Procter & Gamble, A & P and Pepsico. Federal prosecutors would not comment about possible mismanagement of those contests.

Neither Taco Bell nor Alpha Beta is suspected of any wrongdoing, and both companies have fully cooperated with investigators, Katz said.

“Alpha Beta Co. had no knowledge of, or any involvement with, any of the alleged criminal acts,” the chain’s senior vice president, Bill Wade, said. “It should be noted that if in fact these allegations are proven to be true, the victims of the crime would be Alpha Beta and its customers, since funds provided by the company for prizes were fraudulently misused.”

Taco Bell spokeswoman Lisa Holler said the company immediately went to authorities when it discovered evidence of C & K’s alleged wrongdoing.

“We’re pleased to hear that the authorities have caught those who are apparently responsible,” she said.

Suspicions Raised

Katz said that suspicions about the Taco Bell contest were first raised when a district manager in Indiana attempted to contact a local winner to congratulate him.

As it turned out, the local winner was a genuine contestant whose name had been misspelled. But when the manager was unable to locate him, he phoned headquarters and said “something fishy” was going on, Katz said.

Taco Bell asked for a list of winners from C & K, and several names on the list were also misspelled, preventing Taco Bell officials from locating them.

At that point, Taco Bell went back to C & K and demanded an audit. The contest company hired an independent auditor who certified that the prizes had been properly awarded. Unknown to Taco Bell, the accountant who prepared the audit was the father of another high-level executive at C & K.

Taco Bell was satisfied with the audit, Katz said, but decided to make one last check, telephoning various winners and receiving assurances that all had received their prizes.

Then the Taco Bell representatives called Lee’s house in San Diego. Lee was on assignment in the Philippines, Katz said.

“They reach Lee’s wife, they say, ‘We’re calling around about your husband winning the car.’ She says, ‘What car?’ ” the prosecutor said.

Lee had $1,500, which federal authorities described as “hush money,” waiting for him from C & K when he got back.

In the meantime, authorities said, C & K mailed Taco Bell investigators a photocopy of the back of the $1,500 check with Lee’s endorsement, with the front copied to make it appear as though it were the $28,500 check for the Corvette. Investigators noticed later that the front of the check, however, had not been coded by a bank, and thus could not have been cashed.

Interview With Investigators

Subsequently, Katz said, Lee and his wife made an appointment for an interview with federal investigators. Two days before the appointment, Lee went to the South Laguna home of Kim Curtin, Kevin Curtin’s brother, and told him he was not going to lie about the prize, the prosecutor said.

Kissane flew out from the East Coast with $25,000 in cash, gave it to Lee, and directed him to be “curt” with the investigators, “to tell them ‘I won fair and square, and stop harassing me,’ ” Katz said.

But Lee broke down during the interview, Katz said, and admitted everything.

Cash Returned

“He gave Taco Bell back $12,000; he’d blown the rest in the intervening day,” the prosecutor said.

John Curtin, 37, of Sea Girt, N.J.; Kissane, 35, of Brielle, N.J.; Kim Curtin, 35, of South Laguna; Baratta, 56, of Port Au Peck, N.J., and Lee, 50, are all charged with 11 counts of mail fraud and one count of wire fraud. All but Baratta are also charged with an additional count of obstruction of justice by use of misleading conduct.

Lawyers for most of the defendants could not be reached for comment Tuesday. Baratta’s lawyer, Jan Lawrence Handzlik, said the automobile dealer “denies the charges and expects to be found not guilty at trial.”