8 Arrested in Plot to Steal Game Prizes
With countless McDonald’s French fries and sodas came the chance for riches: Grab a quick bite, play our latest promotional game and walk away a McMillionaire.
There was just one problem. The games were rigged.
Acting on an informant’s tip, the FBI arrested eight people Tuesday in an elaborate scheme to allegedly plant big-money game cards in the hands of fake “winners,” who claimed the prizes and then split the proceeds with their recruiters.
Authorities alleged that the conspirators raked in about $13 million in fraudulent games dating back to 1995, including fast-food versions of “Monopoly” and “Who Wants to Be a Millionaire.”
At the center of the scam, officials said, was a Georgia man who worked for the Los Angeles-based marketing company that has run McDonald’s many promotional contests around the world in recent years. Known as “Uncle Jerry” to the family and friends whom he allegedly brought into the con, 58-year-old Jerome Jacobson confiscated the most valuable game cards--offering such prizes as $1 million or a Dodge Viper--and passed them along to his associates before the cards could be randomly distributed at McDonald’s restaurants around the country, authorities said.
No one at McDonald’s was implicated in the scheme, and the Chicago-based company cooperated fully in the FBI’s yearlong investigation, officials said.
In fact, McDonald’s agreed at the FBI’s request to go ahead with the latest incarnation of its Monopoly giveaway this summer even after investigators suspected that Jacobson’s ring had rigged the game to claim two more $1-million prizes. As customers played millions of game cards with no real chance of winning the biggest prizes, the FBI was conducting court-approved wiretaps on the alleged conspirators over the last six weeks to gather evidence against them.
McDonald’s spokesman Walt Riker said that attracting the fast-food icon’s 23 million daily customers to a game the company knew was rigged was not a step McDonald’s took lightly.
“But our No. 1 goal was to get the bad guys, which meant fully cooperating with the FBI . . . and working together with them to put the trap in place,” Riker said in an interview. “I think the customers will realize that we did the right thing.
“We were scammed, along with our customers.”
New Promotion Set ‘to Right This Wrong’
McDonald’s said that “to right this wrong” perpetrated on its customers, the company will begin yet another promotion--this one, a $10-million “instant giveaway” that will run from Aug. 30 through Sept. 3.
“McDonald’s is committed to giving our customers a chance to win every dollar that has been stolen by this criminal ring,” said company Chairman Jack M. Greenberg. “This initial $10 million is the first important step towards fulfilling this commitment.”
FBI Acting Director Thomas Pickard said in announcing the eight arrests that federal agents first got a tip about a year ago from an unidentified informant who had information about a conspiracy surrounding the McDonald’s games and gave a rough sketch of how it worked.
The FBI was initially skeptical about the tip, saying that it sounded unreliable, and it was months before investigators began to penetrate the workings of the crime ring, according to an FBI official who worked on the case but asked not to be identified.
As the FBI began looking for links among the people who had claimed McDonald’s biggest prizes in the last few years, the search eventually led to Jacobson in Georgia, who handles security for Los Angeles-based Simon Marketing Inc.
Simon Marketing has handled virtually all of McDonald’s promotions in recent years, from game giveaways to Happy Meals and the wildly popular Teenie Beanie Babies promotion a few years ago.
The company’s high-profile role had occasionally sparked controversy. Last year, the marketing firm stopped using a Hong Kong manufacturer to make McDonald’s toys after it was revealed the toys were produced by factory workers as young as 14. And in 1994, McDonald’s had to apologize to Muslims who were offended by the inclusion of a Koran scripture on a World Cup promotion in which Simon also took part.
But Tuesday’s arrests suggest a much more serious problem for the Southland company.
McDonald’s immediately fired Simon Marketing from its promotional accounts, saying that the company did not have adequate management oversight. “They betrayed us and our customers,” Riker said.
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.”
According to an affidavit filed in federal court in Florida as part of the investigation, Simon’s Jacobson was one of only a handful of people--along with representatives from an Atlanta printer and an unidentified accounting firm--who jointly controlled the high-value game pieces once they were printed.
The pieces were supposed to be randomly distributed to participating McDonald’s restaurants and other outlets. In the latest version of the Monopoly game this summer, customers got game cards off soda cups, French fry cartons or advertising supplements and could peel back the cards to find out if they had won anything. There was supposed to be one “instant” $1-million prize, and a second million-dollar prize went to whoever collected both the Boardwalk and Park Place game cards.
Many customers won smaller prizes, but authorities said that the most valuable game pieces never made it to the restaurants. Instead, they alleged, Jacobson “embezzled” them and used his friends and associates to in turn recruit their relatives to claim the cash and prizes.
The conspirators allegedly split the proceeds. While FBI officials would not break down the financial split, the affidavit notes that “Uncle Jerry” would require a cash “deposit” to release a winning game card, and he would also receive the first $50,000 installment from McDonald’s on a $1-million ticket. Some fake “winners” allegedly mortgaged their homes to come up with the money to purchase the winning game pieces from him, the affidavit said.
Suspects Faked Addresses
Authorities said the suspects were careful to create fake addresses and cover stories to avoid suspicion.
A South Carolina man who was arrested, for instance, established a fraudulent residence in Tennessee before claiming his $1-million prize because there had already been a winner in his area and he thought a second prize might stir questions, the affidavit alleges.
And a Rhode Island man, videotaped earlier this month by what he thought was a McDonald’s video crew doing a promotion, gladly told the story of how he supposedly peeled the winning ticket from a People magazine advertisement. The video crew was in fact an FBI undercover team that had linked him to the scheme.
Jacobson appeared Tuesday in federal court in Atlanta, where his bail was set at $1 million. He was not required to enter a plea. In addition to Jacobson, the FBI arrested Linda Baker and Noah “Dwight” Baker of Westminster, S.C.; John Davis of Granbury, Texas; Andrew Glomb of Fort Lauderdale, Fla.; Michael Hoover of Westerly, R.I.; Ronald Hughey of Anderson, S.C.; and Brenda Phenis of Fair Play, S.C.
Officials said Davis contacted McDonald’s three weeks ago to claim the latest $1-million prize. The FBI, in eavesdropping on conversations involving the alleged conspirators, said it had already identified Davis as the ring’s latest “winner” even before he approached McDonald’s to claim the prize.
All eight people are charged with conspiracy to commit mail fraud, carrying a maximum penalty of five years in prison and a fine of $250,000 under federal law. More arrests are possible as the investigation continues, FBI officials said.
