NewsMax.com Wires
Wednesday, Aug, 22, 2001

The alleged conspiracy was said by authorities to have netted more than $13 million in fraudulently "won" prizes.

One of those arrested was an employee of Simon Marketing Inc., a Los Angeles company hired by McDonald's to administer the games.

Ironically, one of the meetings in the alleged conspiracy occurred in July in a community called Fair Play, S.C., the FBI said.

A senior FBI official said Tuesday that more arrests may follow. "We've still got a lot of people to talk to," the official said, referring to potential suspects across the nation.

McDonald's Corp., which was cited by FBI officials for its cooperation in the investigation, immediately announced a new contest to counteract the impact of Tuesday's arrests. In a statement, Jack Greenberg, McDonald's chairman and CEO, said the fast-food chain was giving its customers the chance to win $10 million "in an instant giveaway from Aug. 30 through Sept. 3, 2001."

Greenberg also said McDonald's was terminating its relationship with Simon Marketing, given "the duration of the alleged conspiracy, the lack of any meaningful oversight and the magnitude of the losses."

At a hastily called news conference in FBI headquarters Tuesday afternoon, Attorney General John Ashcroft said the eight arrested were charged in a federal criminal complaint filed in Jacksonville, Fla.

The Simon Marketing employee was named as Jerome P. Jacobson, 58, of Lawrenceville, Ga.

The alleged scheme began as early as 1995, the FBI said.

Jacobson, who worked in the security department of the firm's Lawrenceville office, allegedly obtained the winning game pieces for high-value games such as McDonald's "Monopoly" and "Who Wants to Be a Millionaire."

He allegedly gave the pieces to at least three "recruiters," Dwight and Linda Baker, both 49, of Westminster, S.C., and Andrew Glomb, 58, of Fort Lauderdale, Fla. Two more possible recruiters in Statesboro, Ga., were being questioned by the FBI on Tuesday.

The recruiters in turn solicited other people, often friends or relatives, who would present the game pieces to McDonald's and falsely claim the prizes.

The government alleges that Michael L. Hoover, 56, of Westerly, R.I., and Brenda S. Phenis, 50, of Fair Play, but currently in Indianapolis, "won" between $500,000 and $1 million each. Even though he was also a recruiter, Ronald E. Hughey, 56, of Anderson, S.C., also "won" a cash prize of $1 million.

The federal complaint said John F. Davis, 44, of Granbury, Texas, was allegedly recruited by Dwight Baker and Hughey, and claimed a $1 million prize in the 2001 "Monopoly" game. Hoover, allegedly recruited by Glomb, claimed a $1 million prize in the same game.

Hughey, allegedly recruited by Dwight Baker, claimed a $1 million prize in the 2001 "Who Wants to Be a Millionaire" game. Phenis, also allegedly recruited by Dwight Baker, claimed a $500,000 prize in the 2001 "Who Wants to Be a Millionaire" game.

All of those named were arrested Tuesday, but a number of other people were being questioned. "We want to hear their stories," the senior FBI official said.

Ashcroft and the FBI praised McDonald's cooperation. The attorney general said he wanted to acknowledge "the indispensable assistance of McDonald's. The company has cooperated fully in this ongoing investigation and that cooperation has helped make today's arrests possible."

Deputy Director Tom Pickard, who is running the FBI until new Director Robert Mueller is sworn in, also praised the company and CEO Greenberg. "Our hats are off to these good corporate citizens and everything they are doing to support this investigation."

A senior FBI official, speaking on background after Ashcroft and Pickard, said McDonald's was notified of the investigation and continued the promotional games at the government's request. Simon Marketing was notified of the investigation Tuesday.

Copyright 2001 by United Press International.

All rights reserved.

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