Man Convicted in O.C. Scam Is Charged in Riverside Case

A Long Beach man previously convicted of operating a telemarketing scam in Orange County was charged Thursday with helping others conduct a fraudulent fund-raising scheme for charities in Riverside County.

Phillip Shaheen, 41, who swindled 7,500 people nationwide out of $7 million through a company he called Prizewinners, was charged in federal court in Los Angeles with two counts of wire fraud in the Riverside case. The scheme was broken up in a major federal crackdown on Southern California telemarketers 15 months ago.

Shaheen is accused of working as one of several callers in a boiler-room operation run by Stephen P. Olson, whose company arranged to raise money for Riverside-area charitable groups that included the California Adolescent Recovery Ranch and the First Church of the Living God.

Shaheen has agreed to plead guilty to the charges, Assistant U.S. Atty. Brent Whittlesey said. Olson, 38, pleaded guilty to telemarketing fraud and is serving a 46-month federal prison term.

The Riverside operation was closed in October 1996, when the FBI and other law enforcement agencies raided five companies in Orange, Los Angeles and Riverside counties, arresting a dozen people initially. Further investigation led to charges against others, including Shaheen.

The coordinated effort, dubbed Senior Sentinel, targeted telemarketing frauds aimed at the elderly. Many of the victims were in their 80s and 90s, authorities said.

Olson’s scheme bilked 200 people across the country of $1.6 million by telling victims they had won large cash prizes that they could redeem by paying substantial amounts of money to the charitable organizations. But there were no prizes, and no one who sent money received any awards.

The ranch’s operator, Charles T. O’Brien, and the church’s operator, John Reid, both from Riverside, pleaded guilty to federal fraud charges. Each was sentenced to six months in prison.

Other callers in Olson’s operation were charged in a separate indictment last month. They are Gary Maddux, 36, of Santa Ana Heights; Scott Matthews, 30, of Fountain Valley; Tony Pistilli, 29, of Huntington Beach; and an unnamed defendant who is a fugitive.

Pistilli is serving a federal prison sentence for fraudulent telemarketing in another case. Maddux is being held in custody pending trial in a separate telemarketing case. Matthews was arrested Wednesday and released on a $100,000 bond. Neither the defendants nor their lawyers could be reached for comment.

Shaheen operated Prizewinners from January 1991 through March 1993 at locations in Long Beach, Los Alamitos and Garden Grove. The scheme used a fraudulent pitch that promised victims they had won a “grand prize” that would be awarded if they sent a “promotional fee” of several hundred dollars to Prizewinners.

Shaheen pleaded guilty last June to two counts of wire fraud in that case and is awaiting sentencing.