Three Minnesotans are among five women who have pleaded guilty to their roles in a nationwide telemarketing fraud scheme that swindled some 183,000 victims out of more than $335 million.
The five admitted Tuesday in U.S. District Court to participating in the sprawling operation that allegedly involved 60 people from across the United States and Canada who bilked victims, many of them elderly, over two decades.
Stacey L. Persons, 34, of Andover, along with sisters LeeAnn Garcia, 26, and Patrecia N. Shinn, 53, both of Cambridge, all pleaded guilty to conspiracy to commit mail fraud. Also entering guilty pleas Tuesday were Petra J. Laboy, of Cape Coral, Fla., and Angel Wilson, 42, of Oxford, Miss.
These dozens of cases represent the first time federal prosecutors in Minnesota have charged people under the Senior Citizens Against Marketing Scams Act of 1994, which seeks to protect this age group from such a predatory scam.
The telemarketers in on the scheme followed scripts that told them to falsely claim the victims owed a large outstanding balance for magazine subscriptions, then tricked them by offering to pay off that balance in exchange for a lump-sum payment, according to indictments. The telemarketers frequently intimidated the victims by getting angry and making threats of legal action, the charges said.
Other scripts “were designed to induce consumers, through a series of lies and misrepresentations, into unwittingly signing up for expensive magazine subscriptions,” the charges read.
According to Tuesday’s guilty pleas and court documents:
From January 2010 through February 2020, Persons owned and operated General Subscription Services (GSS) and Amerimag Services, two Minnesota-based companies involved in fraudulent magazine sales. Her companies ran a telemarketing call center in Fridley.
Persons obtained lists of consumers who had active magazine subscriptions through other companies. Her employees called the people listed and, through lies and misrepresentations, signed them up for expensive magazine subscriptions or falsely claimed to renew existing subscriptions at a discount.
In reality, the telemarketers were calling to defraud the victims by tricking them into unwittingly signing up for entirely new magazine subscriptions. Persons and her company defrauded thousands of victims and amassed nearly $7 million.
As part of her guilty plea, Persons agreed to pay the money back to her victims. Federal sentencing guidelines call for her to be sent to prison for anywhere from 11¼ to 14 years.
Shinn and Garcia worked as telemarketers for GSS and Amerimag. In the sisters’ respective guilty pleas, Shinn agreed to pay back $50,000 and Garcia agreed to $15,000 in restitution. Sentencing guidelines suggest prison time ranging from about 3½ to 4¼ years for Shinn and 2¼ to 2¾ years for Garcia.
Federal guidelines are considered advisory and give the judges in these cases discretion in the ultimate punishment. Also, the lawyers on both sides can argue at sentencing for what they believe is just.
Laboy worked as a sales manager and telemarketer for several fraudulent magazine companies in south Florida. She agreed to pay $50,000 to her victims.
Wilson worked as a telemarketer for Mississippi-based Online Reading Club Inc. She agreed to pay $15,000 her victims.
Court records do not yet show sentencing guideline calculations for Laboy and Wilson.
Sentencing dates for the five have yet to be set.