Federal Prosecutors Charge 60 People In Magazine Fraud Scheme Targeting Seniors

Sixty people have been charged in a magazine fraud scheme that took advantage of seniors.

According to a report by the Minneapolis Star Tribune, the federal government says the telemarketing scam defrauded 183,000 people across the U.S. for more than $335 million over a 20-year-period. Many victims were elderly.

Fourteen defendants are described as owners of companies involved in phony magazine sales. Another 16 were call-center managers, 10 were telemarketers and four served as lead brokers, who sold lists of consumers to call.

The Star Tribune says authorities are calling the scheme “the nation's largest-ever elder fraud case.” 

Minnesota U.S. Attorney Erica MacDonald announced the details of the criminal case on Wednesday.

The scheme consisted of creating "lead lists" of people who were already paying for magazine subscriptions, but could be convinced to make additional payments.



The telemarketers followed scripts. They would falsely claim to be associated with a victim’s existing magazine subscription company, and say the victim owed a large outstanding balance — then trick them into making a lump-sum payment. 

Some called to offer a reduction in monthly payments (or a renewal) for an existing subscription, but they were actually signing them up for new and expensive magazine subscriptions.

The telemarketers would often intimidate the victims, or threaten them with legal action. 

Some of the victims were being charged by up to 10 fake companies at a time, and paid as much as $1,000 in monthly credit-card charges, according to court documents obtained by the media. The names on the lists were sold for as much as $10 or $15 each.

Charges filed against the defendants include conspiracy, mail fraud and wire fraud.

This case is also the first time federal prosecutors in Minnesota have charged a case under the Senior Citizens Against Marketing Scams Act of 1994, according to MacDonald.

At the top of the scheme is Russell “Rusty” Jason Rahm, the owner and CEO of Kansas-based firms involved in fraudulent magazine sales. Those companies include Subscription Ink Co. and Millennium Marketing, according to AARP. 

Co-defendants come from more than a dozen states and Canada.

Federal authorities have created a website to find any other victims.

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