150,000 victims lost $300M to decades-long telemarketing scam
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Federal prosecutors in Minneapolis are expected to rest their case Monday in the trial of three people charged in a $300 million telemarketing scam involving dozens of defendants. Authorities say 150,000 victims across the country unwittingly signed up for magazine subscriptions that they did not want, and some lost tens of thousands of dollars.
Amondo Antoine Miller, Tashena Lavera Crump, and Ballam Hazeakiah Dudley are among five dozen defendants in the case. Most have pleaded guilty and many have cooperated with the government.
About 10 years ago, some kids raising money knocked on Penny Mashburn’s door in Franklinville, N.C. and sold her two subscriptions. One was for a cat publication, and another for a sudoku puzzle magazine. The fundraiser was legitimate, and Mashburn, 72, soon started receiving her periodicals. But then, she said trouble started.
“The next thing I know, I’m getting a phone call wanting to know if they’re alright and they arrived on time,” Mashburn said.
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The caller asked if she was satisfied with her subscriptions and if she wanted any more.
“I said, ‘No, there’s not.’”
Despite Mashburn’s refusal, magazines including Better Homes & Gardens, People, Horse & Rider, and Reader's Digest soon began piling up in her mailbox. She had no time to read them.
Before Mashburn retired from her logistics job at a gas pump manufacturer, she’d been working 50 to 60 hours per week. Mashburn spent the rest of her time caring for her husband Ronny, who was dying from Parkinson’s disease. By 2019, he needed a nursing home.
Nancy Stowe, Mashburn’s sister, helped the couple navigate the Medicaid application, which required a close look at their bank statements.
“We discovered exactly how big this hit was to her and her husband, how much money had been taken from them,” Stowe told MPR News.
They found that dozens of companies with names such as Central Subscription Services and Readers Club Home Office had been siphoning cash from Mashburn’s bank account multiple times each month for years. Her total loss added up to more than $68,000.
Mashburn and Stowe, 69, who now live in Georgia, traveled to Minneapolis in mid-October to testify in the federal trial of three people who allegedly owned and managed some of those companies.
Prosecutors said that beginning around 2000, scammers working out of bare-bones “boiler room” offices in the Twin Cities suburbs, Littleton, Colo., Oxford, Miss., and elsewhere bought and sold sales lead lists that included magazine subscribers’ names, addresses, and often credit and debit card numbers.
The callers pretended to work for legitimate periodical publishers and followed scripts in which they would falsely claim to have a pre-existing business relationship with the victims.
In many cases, they would offer price breaks, and then record the final few minutes of the call, often on analog cassette tapes, so that taken out of context it would sound as if the victims had agreed to new subscriptions, prosecutors said.
In one instance, Corlos Kentrell Smith, of Midwest Publishers Home Office, called Rose Cubur of Stafford, Va. and offered her a $5 discount on her subscriptions, which she accepted.
What Smith did not know when he called Cubur from a small office near St. Louis Park High School in 2019 is that Cubur was really an undercover postal inspector from across town. In 2021 Smith, 44, pleaded guilty to conspiracy to commit mail fraud.
Midwest Publishers got Cubur’s fake identity from Wayne Robert Dahl Jr., who ran another fraudulent company. Former Minnesota Attorney General Lori Swanson sued Dahl and his Your Magazine Service, Inc. in 2016, prompting the federal investigation. Dahl, 55, later pleaded guilty to mail fraud, and helped investigators slip phony lead lists to others still in business.
Testifying for the government, Dahl said that he started the company in 2007 after finishing a federal prison sentence for selling methamphetamine. He began the business in the laundry room of his mobile home in Chaska, Minn. using a customer database that he stole from Brian James Williams, another defendant who pleaded guilty in the case.
Dahl told jurors that he was “morally bankrupt” and “you try not to think about all the lies you’re telling, all the stealing you’re doing and all the old people you’re hurting.”
Dahl, who has yet to be sentenced and could be sent back to federal prison, declined an interview request through his lawyer.
During their cross examination of the government’s witnesses, attorneys for the defendants generally presented them as bit players who had limited knowledge of the overall scheme. Defense attorneys also have highlighted the criminal records of the cooperating witnesses.
Jurors are expected to hear from about a dozen defense witnesses this week before each side presents its closing arguments.