Sisters Help Bring Down a Magazine Telemarketing Scam

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[00:00:01] Bob: This week on The Perfect Scam.

[00:00:05] Nancy: I had gone to her home and saw these stacks of magazines everywhere. I was a little anxious about all of them, because they were things that she didn't read, or hadn’t subscribed to, like Allure, or Body Beautiful, or... There were charges from five or six different companies. It got up to where the charges started increasing. They went from $39 to $49, then at $65, $80 up to $99, then $179, $199. They were just, just rude, you know, I'm sorry, but we're not going to, your sister agreed to this. We have a contract. She agreed to 10 years. This is the kicker, she agreed to 10 years of that magazine.

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[00:00:58] Bob: Welcome back to The Perfect Scam. I'm your host, Bob Sullivan. Sometimes it's the smallest opening that lets criminals steal the biggest amounts. Today's story involves a woman who just wanted to help kids raising money for a school and signed up for a magazine subscription, which led to years of harassment and the theft of much of her savings. But, it also led to this woman and her sister bringing down a 20-year conspiracy that robbed more than 150,000 victims nationwide. Wait until you hear about their 48-hour train ride across America, all so they could testify in federal court and help end this reign of terror that was all based on magazine subscriptions. And listen up, because this old fashioned sounding scam is alive and well and still hitting people across the country. Now, I want you to meet Penny Mashburn and Nancy Stowe, sisters who have a beautiful relationship that, well, it was a lifesaver in the end. You'll hear Nancy sometimes finishes Penny's sentences, as sisters sometimes do, particularly when your sister has faced some serious health problems.

[00:02:14] Bob: Penny, was there anything about the relationship that you guys had when you were kids that would have foreshadowed for you that you would be this close even later in life?

[00:02:22] Penny: Probably not.

[00:02:23] Nancy: I do.

[00:02:24] Penny: You do? Okay.

[00:02:25] Bob: Okay Nancy, go ahead.

[00:02:26] Nancy: Yeah. Penny would beat me up. We were the only two girls. We had two older brothers and a younger brother. Um, and then we were in the middle there. And uh, Penny would, she'd sock me in the arm as hard as she could every chance she got. If I told mama, then mama beat my butt and she'd sock me again, so.

[00:02:48] Bob: She was trying to teach you not to be a complainer, right?

[00:02:51] Nancy: That's it, don't tattle and don't be a whiner, and uh, no matter who you tell, you're gonna get it twice, so, um, I learned that we would be close. And as sisters, we were always close growing up.

[00:03:04] Bob: Why did you hit her, Penny?

[00:03:05] Penny: In my defense, uh, our oldest brother would do the same thing to me.

[00:03:10] Bob: Aha! Explains it.

[00:03:12] Bob: That was a long time ago. Nancy and Penny went off to have their own lives in different states. But now, their brothers have all passed away, and they are the only two members of the family left. So it's good they have each other, because life got really complicated for Penny a few years ago.

[00:03:31] Bob: Okay, so, you guys both live in Georgia, which is really nice, uh, who's older, who's younger, uh, Penny?

[00:03:37] Penny: I'm older, by three years.

[00:03:39] Bob: Heh, it's a, it's really, it's okay if you talk with each other, you're sisters, right?

[00:03:43] Nancy: Yeah, she came to live with us in 2019 after being diagnosed with breast cancer.

[00:03:49] Bob: And you were there to take care of her, which is amazing,

[00:03:51] Nancy: Yes, she came down to our home here. and had to receive her chemotherapy and radiation treatment. Her husband at the time was, had severe Parkinson's and was put into the hospital and then into a nursing home and he passed away during COVID. So she sold her house in North Carolina and came down to live with my husband and I.

[00:04:12] Bob: But Penny, that's just so much to deal with all at once. I'm so sorry you had to go through all that.

[00:04:18] Penny: It's part of life.

[00:04:19] Bob: But thankfully you have a family that you were able to move in with, right Penny?

[00:04:23] Penny: Yes. I have my sister, and she's always been around for me, so I couldn't ask for more.

[00:04:32] Bob: And it's during an intense time when Penny's dealing with her husband's illness that predators came to the door. Well, that's not quite right. Innocent schoolchildren came to the door, but they were unwittingly doing the work of predators.

[00:04:48] Bob: So some kids just knocked on the door and were selling subscriptions and you just wanted to help them out? Is that how this all started?

[00:04:54] Penny: Yeah, they were from the school. It was right up the street, a fundraiser, and they came wondering if I wanted to buy a magazine to help support the school band or something. I forget what it was. So I looked at it and I said, okay. What's a couple of magazines, say? I think I got Sudoku and a cat magazine, and that was fine. I got em every, you know, every month or every three months or whatever it was the subscription was, but then I started getting a phone call here and there, wanting to know if I liked my magazines, and which one did I like the best, and would you like another that type.

[00:05:36] Nancy: This was back in 2014.

[00:05:38] Penny: Yeah, and sometimes I would be at work and my husband wouldn't answer the phone, and they'd hook him into it to where he bought several magazines. And uh...

[00:05:50] Bob: And this is in 2014, was he already diagnosed with Parkinson's at the time?

[00:05:55] Penny: Yeah, he was, he was, he got put on disability in ‘91, he just progressively got worse as time went on.

[00:06:04] Bob: But they started calling and offering you different deals, right? Right,

[00:06:09] Penny: different deals, yeah.

[00:06:11] Bob: But pretty soon, it seemed like Penny was getting a pile of magazines she didn't want every day, and a pile of bills that she couldn't really pay.

[00:06:21] Bob: But, when she tried to call and cancel, things got even worse.

[00:06:26] Penny: When I realized that I needed to get rid of these things, I would tell them that I don't like this magazine or I don't need this magazine, whichever one it was, and tell them that I want to get out of this subscription. They tell me, well, you can't get out of it right now because we've already paid the magazines and you've got to pay us back. And that would be the rest of that conversation and then they would call me back and tell me that they were from a closeout department in the magazine store and they understood that I wanted to finalize everything and so they said what you owe $500 on the magazine left and if you pay $399 or $499 we'll close it for you. And I said okay that's fine I'll do that.

[00:07:18] Bob: So Penny would pay several hundred dollars to stop getting these magazines. But they wouldn't stop. And chasing down the right people, waiting on holds, making her case, well, that got harder and harder.

[00:07:34] Penny: And my husband being sick was in the background. If I got home from work and the phone rang, “Who's on the phone? I thought you talked to him yesterday.” You know, and, “Hurry up, I need something,” you know, that type thing. And it just, a costant to where he wanted me to spend all my time at home with him, or on him, or about him. Don't get on the phone and interrupt him. So whatever they were saying, for the most part, I would cut them short and say, I'd agree to it.

[00:08:06] Bob: You just wanted to get off the phone so you could take care of your husband, right?

[00:08:09] Penny: I needed to get off the phone, yeah.

[00:08:11] Bob: And also, operators would bully her.

[00:08:16] Penny: They were impatient and disrespectful. You know, “You can't do that. You signed, you signed an agreement,” or “You agreed to get this magazine. So, it was one of these things to where you had to quit answering the phone."

[00:08:30] Bob: Would they yell at you?

[00:08:31] Penny: No, I can't say that they would yell at me, you know, they may have, I can't remember, but they would, they would be real harsh, like, who am I to think I can stop this stuff, you know?

[00:08:44] Bob: At the time, Nancy is living far away in Georgia, but she goes to visit her sister who has just been diagnosed with breast cancer, and notices something really strange about the house.

[00:08:55] Nancy: And I had gone to her home in Asheboro, North Carolina, and saw these stacks of magazines everywhere. I was a little anxious about all of them, because they were things that she didn't read, or hadn’t subscribed to, like Allure, or Body Beautiful, or...

[00:09:14] Bob: And when they talk, there is something even more disturbing.

[00:09:18] Nancy: My sister would, at times, say that there was a problem with her bank account, that there was a problem with money, and could I loan her some money, and that, um, she would pay me back, but that there was, somehow, her can't count bank accounts were getting overdrawn.

[00:09:35] Bob: Penny is running out of money to pay the bills, and she's dealing with her own breast cancer and the demands of her husband's debilitating disease. And when he finally becomes too sick for Penny to take care of, they need to find a home for him. And they need to get on Medicaid so they can afford the kind of care he needs. Well, Medicaid requires a lot of forms. And when Nancy helps Penny with the paperwork, there is a shocking discovery.

[00:10:03] Nancy: When she came here and her husband had to be placed into a nursing home, we had to get him on Medicaid. To do that, we met with the attorneys and they told us the first thing that had to be done is we had to figure five years of their financials. Now, my sister was going under chemotherapy at the time and she had chemo brain, she couldn't think anything. I mean, you know, her body is just going crazy. And so I took on the task of trying to gather all this information and I had to gather all of her bank account and bank statements and I kept coming across different names of magazine subscribers and all these charges, they started out small, like $39.95, $39.90, but they would come out once a month, some of them would come out twice a month, and then there were times that they would come out, um, several companies started taking her money at a time, so there were charges from five or six different companies. It got up to where the charges started increasing. They went from $39 to $49, then at $65, $80 up to $99, then $179, $199.

[00:11:23] Bob: So Penny, you're sitting there with your sister, and she's writing these numbers on a piece of paper. How does that feel?

[00:11:30] Penny: You feel rather foolish, like, bad to, I don't mind giving away anything that I've got if somebody else needs it, but they were taking me for a ride.

[00:11:41] Bob: But when you do this accounting, um, did you, did you have any sense, uh, Penny, in the year or two before that, why is my bank account, why am I overdrawing? I mean, did you have any sense that something was wrong until this point?

[00:11:52] Penny: I knew that I had several charges, but I really didn't pinpoint it. I didn't, I didn't have the time to sit down and try and figure it out myself. Things were escalating at home, and I retired in the end of 2015, and I was then at home being full time nurse, caregiver, and bottle washer, and it was too much to even take time to figure it out. I just tried to roll with the punches and, and cover what I could.  

[00:12:24] Nancy: My, in my sister's defense, it became so overwhelming to her. She literally, Ronnie would not allow her five minutes to herself. You know? She had to be his constant companion and... So she didn't have time to figure out where their money was going. It was just, she just kept trying to put more in there, borrow from here or there to try to cover their expenses.

[00:12:50] Bob: And when Nancy finally adds everything up, all those $20 subscriptions, well, the total is astonishing.

[00:12:59] Nancy: So when I got all the information together, it was the first time that Penny realized the enormity of the amount that had been taken from her. And it was over $68,000.

[00:13:14] Bob: $68,000? The total just hits them both between the eyes. From $20 subscriptions to $68,000?

[00:13:23] Nancy: It just blew me away. I understood the surroundings around her. She worked 60 hours a week, a job she'd been at for 40 some years. She tried to take care of her husband, who was always very possessive, but even more so after he was sick. My heart broke for her, but I was angry.

[00:13:43] Penny: She was pissed.

[00:13:45] Nancy: I, I was really angry. How could she, how could, how could anyone let somebody, these people, take this money.

[00:13:52] Bob: So, of course, Nancy gets involved in calling all these magazine companies and trying to make this stop, but...

[00:14:00] Nancy: We would call and ask if they would, you know, that my sister has breast cancer, she's not interested in these magazines, how can we stop this subscription? Oh, you can't stop it. We'll turn it over to collection if you stop paying.

[00:14:13] Bob: What, what, what did they mean to you?

[00:14:14] Nancy: Yes, they were just, just rude, you know, I'm sorry, but we're not going to, your sister agreed to this. We have a contract. She agreed to 10 years. This is the kicker, she agreed to 10 years of that magazine.

[00:14:29] Bob: She has agreed to 10 years of a magazine?

[00:14:33] Penny: And only one of them sent a refund.

[00:14:36] Nancy: Yeah, she got one little refund. And do you know we still have magazines piling in this house every week? And some of them won't stop until 2030.

[00:14:48] Bob: Until 2030? And remember, Penny's husband is very, very sick, and in the middle of all this, he passes away. Penny is very sick. COVID hits. So Nancy closes Penny's checking accounts, gets her new credit card numbers, and that stops all the withdrawals. But it doesn't stop the ugliness and the phone calls, and, well, Nancy and Penny are just resigned that this horrible thing has happened at a horrible time.

[00:15:17] Bob: You probably wondered, thought nobody would care, right?

[00:15:20] Nancy: Exactly. And so we just thought that this is just what my sister's story was. Is that she was part of this scam and that was the end of it. We'd never thought about prosecuting, because we didn't have these people. You know, every time we contacted somebody, they threatened to send her to the collection agencies, or, you know, were very ugly, really ugly.

[00:15:45] Bob: Until one day, about a year later

[00:15:49] Bob: You got a letter that really got your attention, right? From who?

[00:15:52] Penny: Yeah, I got it twice. From the FBI. They sent me a letter saying that they were investigating a magazine scam, and my name had been turned in. And I thought, this is a scam.

[00:16:06] Bob: Sure, yeah.

[00:16:07] Penny: So I put the letter away. And another week or so, or a month, I got another letter. So, Nancy and I talked about it, and we, uh, called them up. And Nancy talked to them and told them, you know, we've got all this information. If you're interested in it, we can send it to you.

[00:16:25] Bob: The FBI has all this information because Assistant U.S. Attorney Joe Thompson has spent years working on a case concerning a series of companies that have been conspiring against victims for decades, using magazine subscriptions as a cover for a massive crime.

[00:16:44] Joe Thompson: Well, years ago, I had a investigation into a fraudulent magazine sales company called Your Magazine Service, and it was run by a man named Wayne Dahl. They ran a telemarketing call center in suburban Minneapolis. I, that investigation had been ongoing, and it was assigned to me, and I took a look at it, and one of the things I noticed was that there was a lot of victims in that case, I think more than 10,000 individuals, mostly elderly individuals, had been victimized by Your Magazine Service and Wayne Dahl. But when I looked into the financial records of some of the victims, I noticed that it wasn't just Wayne Dahl's company, Your Magazine Service. In fact, many of the victims, including Ms. Mashburn had been charged by magazine companies located all around the country. Some of them are being charged by a dozen or more companies each month. And when you looked on their credit card statements, what you saw is charge after charge after charge each month from different magazine companies. And that caught my eye immediately and led to us digging a little deeper into the investigation.

[00:17:51] Bob: Your Magazine Service. That's a vague sounding name. But, it had a purpose.

[00:17:58] Joe Thompson: It was kind of a clever way of naming it, so when you called, when you called people and said, I'm, you know, I'm Wayne, calling from Your Magazine Service to check in on the status of your magazines, the person to whom, their victim, would think immediately that this was someone that they already had an agreement with, and they're just calling to check in on my existing magazine subscriptions, rather than to charge them for more.

[00:18:19] Bob: Yeah that's a, that's a great way in, it's a great first five seconds, but you said that your magazine was illegally charging 10,000 victims, and then you said many of those victims were also being charged by 10, 15, 20 other similar companies? Do I have that right?

[00:18:35] Joe Thompson: That's right.

[00:18:36] Bob: That spiderwebs into just a massive crime.

[00:18:39] Joe Thompson: That's absolutely right. It was staggering.

[00:18:42] Bob: Staggering in part because so many of the victims are like Penny.

[00:18:48] Joe Thompson: For many of these victims, those were essentially the only charges on their credit cards. A lot of these people were on fixed incomes. They were quite elderly and they did not have much running, many expenses. Uh certainly weren't going out to eat all the time and putting a lot of stuff on their credit cards. So you'd see credit card statements that were essentially all charges from magazine companies. It was staggering.

[00:19:08] Bob: One of the questions I have for you here is, you know, how do $10 a month charges, $20 a month charges end up leading to $70,000 worth of illegal charges?

[00:19:17] Joe Thompson: There were victims who were being charged more than $1,000 a month for magazines by all these, combined by all these different companies, you know, $50 here, $50 there, adds up.

[00:19:26] Bob: And these were people who maybe get $2,000 a month from Social Security, right?

[00:19:31] Joe Thompson: That's right.

[00:19:32] Bob: Joe and his team investigate for a while, and then they decide to go undercover to catch Your Magazine Services in the act.  

[00:19:42] Joe Thompson: Our undercover agents started getting calls, the very first one we got followed a different script and talked about how, I'm looking here at your, at your information and you have, you owe $1,500 to these different magazine companies, well we're from the consolidation department, we’ll consolidate all your magazine subscriptions and we’ll cancel them all in exchange for a one-time payment of $499. Uh, and this is a, this is a scheme or a version of a fraudulent script that preyed upon people who were already being victimized. The people like Penny Mashburn, who had so many charges, and preyed on their desperation to, get out of these contracts by convincing them to make these large one time payments. The reality was they were just getting scammed all over again.

[00:20:23] Bob: Call, they were badgered, right?

[00:20:24] Joe Thompson: Absolutely. They were very, very aggressive. Some of the calls were very aggressive, threatening legal action. And one of the calls, when a victim hung up, they called back and said they're going to sign her up again and she's going to get magazines until the day she dies.

[00:20:40] Bob: She's going to get magazines until the day she dies? Well, that's certainly how Penny feels, so after the initial skepticism that that letter is a scam, well, both Nancy and Penny are glad to get on the phone with the FBI.

[00:20:55] Bob: I'm guessing you had never spoken to the FBI before, right?

[00:20:58] Nancy: No, never. But I worked for an attorney for 20 years, so I really wasn't intimidated about it. It actually was a breath of fresh air that somebody was doing something about this.

[00:21:09] Bob: In fact, remember, Nancy has the written accounting of everything that happened to Penny now. So, they pull that out for the phone call.

[00:21:18] Nancy: Well, we were both together, and I called and spoke to him, we got on the speakerphone and spoke with him, and then he contacted us and said that they wanted Penny to testify.

[00:21:28] Bob: That's just unbelievable. Okay, so you mentioned that you were angry, of course, when you did all this accounting, and now the FBI is in touch with you, and they actually ask you to testify. How did it feel that your anger now had a purpose?

[00:21:41] Penny: It felt good.

[00:21:42] Nancy: Wonderful.

[00:21:43] Penny: Like you'd, you'd, somebody, something was gonna happen, gonna get this stopped.

[00:21:49] Bob: So Penny and Nancy are both anxious to testify against their tormentors. But there's a hitch. The trial will be in Minneapolis. And remember, they are in Georgia.

[00:22:03] Nancy: Penny has kidney failure. And when the discussion came up about us going up to Minnesota, we had talked to her doctor and he said she could not fly.

[00:22:13] Bob: Okay, got it.

[00:22:14] Nancy: Because it would not be safe for her on an airplane.

[00:22:17] Bob: Sure.

[00:22:17] Nancy: So, how, what's the other way we could get to Minnesota? And I said, well, I'm not going to drive. You know, that's a long, hard trip from Georgia to Minnesota. They said, well, what's the only other way? I said, well, we can't go by bus. So, train is the only other way. Then it became an adventure.

[00:22:37] Bob: So the two sisters pile onto the train. Well, four trains, actually, to head to federal court in Minnesota.

[00:22:45] Nancy: Well, it was 48 hours up there. We drove to Atlanta, which is a couple of hours from our home. We boarded the train in, in Atlanta. We had a roomette, and if you've ever traveled by train, a roomette is a private area, but it is seven feet tall, six feet across and 3.6 feet wide.

[00:23:08] Bob: So you were very close.

[00:23:10] Nancy: And in that area, you have your two seats, a bunk that comes down from the top that drops down. From Atlanta to Washington, D. C., we had our own en suite in the little roomette with us.

[00:23:24] Bob: Nice.

[00:23:24] Nancy: Our toilet and sink were, were also in the room with us in the 3.6 inches across, 3 point, 3 and a half feet across. And so you had to step on, I had to climb up on the toilet and on the sink to get up in the bunk on the top, so.

[00:23:41] Bob: Oh boy (laughs). And then, so it takes a better part of a day to get from Atlanta to D.C., right? And then, and then...

[00:23:49] Nancy: Yeah, it was 48 hours up, and then we changed trains, and then changed trains again in Chicago. We fell in love with train travel, or I did, anyway. Um, we got, the one we got on in Chicago to Minneapolis, it had the chef on board. The food was exquisite. Even the microwave food, they served up and down going the other direction. It's very good food. But the chef prepared meal, the food was just exquisite.

[00:24:20] Bob: That's fantastic.

[00:24:21] Nancy: And if we'd stayed on for 48 more hours, we'd have been in Seattle, Washington.

[00:24:25] Bob: That's, that's the empire builder train, right?

[00:24:27] Penny: Yes

[00:24:27] Nancy: Yes.  

[00:24:28] Bob: Yeah, I know all the train names. It's funny, however wonderful that trip was though, like I'm sure you didn't sleep great on those 48 hours in this tiny little roomette, right?

[00:24:38] Nancy: No, we did not.

[00:24:40] Bob: But the next day. It is time to testify.

[00:24:44] Penny: We cleaned up and, uh, and the motel was right across the street from the courthouse. So we walked over there and, and, uh, they met us and took us in the back door and went upstairs in the elevator. It just gets off on their floor and they talked, somebody's there to greet us and they take us in the courtroom one at a time.

[00:25:07] Bob: And then you got called up to testify. You had a swear, right? All that.

[00:25:11] Penny: Yeah.

[00:25:12] Bob: There were three defendants. Were they all sitting there in a courtroom with you, Penny?

[00:25:15] Penny: Yes, they were. Them and their attorneys.

[00:25:19] Bob: Did you look at them while you were testifying?

[00:25:21] Penny: Yes, I did.

[00:25:23] Bob: What did you think?

[00:25:24] Penny: One was a real kind of a sarcastic, I-could-do-no-wrong type person. I mean, he had that attitude that, you know, “Who in the hell are you to question me?” type thing.

[00:25:36] Bob: So she tells her story. About how $20 subscriptions led to $68,000 in bills. About the harassment, the struggles at home. When you were done and you got off the stand and walked down, how did, how did you feel about things?

[00:25:50] Penny: I felt good. You know, they can be smug right now, but they're going to get theirs.

[00:25:56] Bob: But you, you looked at them and you saw like, were they smirking? I mean, what made you think they were smug?

[00:26:01] Penny: One of them was smirking. One of them was sitting up front, stared at the. The wall behind, in front of him, and it was kind of the attitude that this is just a formality, I'm fine, that y'all can't do anything to me.

[00:26:16] Bob: Then it's time for Nancy to testify. She had to wait outside the courtroom while Penny testified.

[00:26:23] Bob: Uh, Nancy, did you see Penny on her way after testifying, like, did you guys pass on your, on your way into the courtroom?

[00:26:29] Nancy: Yes, we did. We did.

[00:26:31] Bob: Did you smile at each other? Did you?

[00:26:33] Nancy: Yeah, kind of a high, and we did a high five, you know?

[00:26:35] Bob: Yes, of course, of course. Yeah, but at least you, you knew she was okay. Cause I would be nervous, you know, I mean, right? I mean, she, there she is telling her story alone without you, I'm sure that was hard for you.

[00:26:44] Nancy: Yeah, it was. And, and I know that with, Penny still has problems with her memory and cognitive issues from the radiation or from whatever health issues in the past.

[00:26:57] Bob: And now it's Nancy's turn to share all she knows about everything that happened.

[00:27:02] Nancy: It was really an intimidating walking into a federal courtroom, and with all its pomp and circumstance, because it really was the prosecution table and the defense tables.

[00:27:15] Bob: You couldn't hear Penny's testimony, right?

[00:27:17] Nancy: No, I could not. I didn't hear anything Penny said. Um, and they asked me the same thing, how I came about coming up with this information.

[00:27:27] Bob: But Nancy tells the jury pretty much exactly what Penny did. And when she's done Prosecutor Joe Thompson knows it really was worth bringing these two witnesses to Minneapolis on those four trains to tell their story.

[00:27:41] Joe Thompson: I mean, it was so sad. Not only that this had happened, to someone of her age, but that it came to this. Not only, you know, she had to be victimized for years, and here she was having to come up to Minnesota, to someplace she hasn't been, in the winter, to testify at a trial, which is, which is scary. But she was, she was brave, and like so many victims of fraud schemes, she got to, to stand up to her, the perpetrators of the crime, uh, which made me proud.

[00:28:09] Bob: Those must be amazing moments to put these two people in a courtroom, you know, one who had so much power over Penny for all these years and her finally getting to tell her story. Can you help people understand how amazing a moment that is?

[00:28:23] Joe Thompson: It's incredible when you see victims, many of whom are scared, you know, people come to a courthouse, I think sometimes lawyers lose sight of it, but there's people that go their whole lives without meeting a lawyer or a judge, or ever going into a room full of people wearing suits. And to stand up and tell your story before jurors and lawyers and judges is a scary thing for people. But again and again over my career, I've seen victims, even the most nervous, who are shy or afraid of public speaking or unsophisticated, you can see them like grow as they get more confident and realize that they're taking control and they're no longer the victim. And we saw that again and again in this case.

[00:29:00] Bob: Do you remember how the room reacted to Penny's testimony by any chance?

[00:29:03] Joe Thompson: Like all the victims, the jury was moved and moved by the victims and their testimony. I think you can't hear from a victim in this case without thinking about your own parents or grandparents or elderly neighbors. And they were angry, angry at the defendants for carrying out this awful scheme and for targeting elderly victims such as Penny over and over and over again. For the jury to hear from the actual victims, you know, when you see a charge for $49, $39, and we're saying it's fraud, the jury might be like, why do I care about $49? You know, why do I care about $3,000, even if the victim lost $3,000? Having people like Penny, witnesses get up on the stand and explain the cost of the crime. How they felt violated and victimized, how they didn't, many of them didn't feel safe. I mean, they would get phone calls harassing them, intimidating them, essentially mugging them over the phone. And for juries, for the jury to hear that, really made the case come alive and made the jury care and helped the jury understand that this was fraud and how serious that fraud was.

[00:30:05] Bob: Mugging them over the phone. I really appreciate that phrase because that's what it is, right?

[00:30:10] Joe Thompson: Absolutely. That's 100 percent what it is. And when you talk to the victims, you understood that. They felt violated after they got off the phone with these people.

[00:30:19] Bob: As the trial goes on, several other victims testify too.

[00:30:23] Joe Thompson: There was a woman named Phyllis Schreier. She was from Brooklyn, New York, and I think everyone was struck by her testimony because when the judge asked her to say her name to the jury to introduce herself, she said, my name is Phyllis Schreier and I'm a 9-11 widow. Peter Brogan is another victim. He got charged over $70,000. He lived in Philadelphia. An elderly man who was getting charged over $1,500 a month by approximately 12 to 18 companies, depending on the month, uh, companies all over the United States and even in Canada. And then there was a victim named Jimmy Simpson, who is notable because he was blind and couldn't read any of the magazines that he got.

[00:30:59] Bob: Penny and Nancy have to head back home, back on another 48-hour train journey, before the trial is over. So, they don't really know what's going to happen next, and they wish they could have done more.

[00:31:12] Nancy: I felt like I really, there was more I would have liked to have said to explain how wrong this is. The injustice that I feel that's been done to my sister, they've taken away security on a monthly basis. You know, when you get hit an extra $700 a month out of your bank account, and then next month you get hit another $700 out of your bank account, it's uh,

[00:31:37] Penny: And you can't stop it.

[00:31:39] Nancy: You can't stop the bleed.

[00:31:40] Bob: So you got back on the train, you had the nice chef dinner again, stopped in Chicago, went to Atlanta, right? All that. 48 hours again, you're home. What did it feel like to come home after all that?

[00:31:51] Penny: It was a relief.

[00:31:52] Bob: But you're still, you're still not sure if they were convicted at this point, right?

[00:31:55] Penny: Well, they told us that the majority of them had pled guilty, but their sentencing wouldn't happen until later on, once they got through all of them.

[00:32:09] Bob: In the end, about 60 defendants were charged in the case. Most pled guilty. But, after a month-long trial, a jury finds three defendants guilty in a conspiracy that stole $300 million from 150,000 people over nearly 20 years, thanks in large part to Nancy and Penny's train ride to Minneapolis.

[00:32:32] Bob: So Nancy, did you, did you get a call from the FBI at some point? Or what, how did you find out?

[00:32:37] Nancy: Yes. Well, we got a text or a message, uh, an email from the team. They were keeping us abreast that they had been found guilty, but that they were still, that you, you know, we had to wait for the, uh, the sentencing. And the sentencing still hasn't taken place.

[00:32:52] Bob: Tell me about your first reaction when you got the email that said they were guilty.

[00:32:56] Nancy: It was kind of a given. It was a relief, but we expected them to be found guilty. I didn't with all the testimony. That really wasn't the thing that they were found guilty.

[00:33:08] Bob: But after all that, the case isn't really finished, Joe says.

[00:33:13] Joe Thompson: You know, we ended up charging 64 people. I think of those 64, 57 pled guilty or were convicted at trial and then three of them are fugitives. We have two fugitives in Canada and one defendant who fled to Sweden, actually, where she remains to this day.

[00:33:29] Bob: So this case still goes on? It does. I have to ask you, because this is also an astonishing part of this for me, unless I read this wrong, this, this, this went on for 20 years before these folks were actually brought to justice, right?

[00:33:41] Joe Thompson:: That's right.

[00:33:42] Bob: 20 years is enough for several careers for most people. I just can't even imagine how somebody would sustain a crime like this for 20 years and not run into legal trouble somewhere along the way. How does something like that happen?

[00:33:53] Joe Thompson: Well, it's interesting. You know, they did have legal issues. Usually consumer protection cases like this are investigated and handled by state attorney general's offices. And that's what happened here. And so people, when they file complaints with the Better Business Bureau or their state attorney general's office, those offices would investigate and sometimes they filed some sort of legal action, but generally it was civil, not criminal. And the defendants would settle those and pay whatever fine they had to do and viewed as the cost of doing business. One of the challenges, these cases often don't get prosecuted federally because on one hand, Any one victim, the case against them is too small to justify federal prosecution, or, which is generally what, it's generally the federal authorities that are involved in, in white collar investigations like this. Here, we were able to aggregate the whole case and charge everyone to make it this big, massive scheme, or recognize it, recognize the large conspiracy, large scheme that it was, and investigate it and prosecute it federally.

[00:34:52] Bob: So, a lot of people have gone to jail in this crime, but Nancy and Penny still feel like there's unfinished business.

[00:35:00] Bob: Seems like you're not quite satisfied yet that justice has really been done.

[00:35:03] Nancy: No, I mean, there are a lot of crooks that get caught, but that doesn't make, that doesn't give restitution to the people that they damaged. And that's what sentencing, and that, well, that's what our judicial system's supposed to do. It's supposed to provide relief. And my sister doesn't have any relief. We're still getting the magazines. She's not getting any money taken from her on a monthly basis, but she's not being given back, not a penny from these people that have stolen things from her.

[00:35:29] Bob: And how would $68,000 change Penny's life right now?

[00:35:33] Nancy: It would give her the opportunity to be able to know that if something came up, she could go live in a nursing home if she needed one, you know? That's the security, that's the security they took away from her. It was the security of her, of being a senior citizen. I think that it would give her the peace of mind that she needs, she deserves at 73 years of age. My sister worked very hard her whole life. She worked, she worked in a factory that made gas pumps. She was there for 40, how long, Penny? 37 years?

[00:36:04] Penny: 37 years.

[00:36:06] Nancy: Yeah And, you know, there were lots of overtime. I mean, my sister made great money and I couldn't figure out why she would call me and ask me for money, you know. But, I didn't know that the financial things. So, I hope that one day that she'll be able to get a piece of the pie back that she worked so hard for.

[00:36:24] Bob: But it was your, your friendship, your sisterhood, that actually stopped this from being even worse than it would have been. And I think that's amazing.

[00:36:31] Nancy: The fact that I, I have, I worked for an attorney for 20 years. And so, I had more knowledge towards the legal side of it than Penny did. And I understood there was a way to stop these people from taking your money. We close your accounts. You know, you don't have to keep letting them have it. Let them turn it over to collections or whatever they threaten. And that's what we told them. Do what you want to do. You're not getting any more of my sister's money. And that's the end of it.

[00:37:03] Bob: But not quite the end of it, because Even though dozens of criminals are in jail, she's still getting magazines, trying to figure out what to do with them all.

[00:37:14] Bob: So, Penny, tell me now that these guys have been convicted, but you know, you're still getting the magazines.

[00:37:20] Bob: How do you feel today about all this?

[00:37:22] Penny: Well, it's, to me, it's a waste that they're sending me all these magazines because I'll either turn around, Eh, eh, before COVID. I used to take them to nursing homes or take them to doctor's visits and leave them in the waiting room. We've got a neighbor that takes them. She's a school teacher and we give her some now, but it's such a waste because most of them end up in the garbage can.

[00:37:48] Bob: There were a couple of good things that have come from this experience. For one, Penny and Nancy have fallen in love with train travel. And also...

 [00:37:58] Bob: Penny, do you think that you are closer to your sister now because of all that's happened here?

[00:38:02] Penny: Most definitely.

[00:38:03] Bob: In what way?

[00:38:04] Penny: In growing up, we, you know, you were the individual and that you worried about what you were doing, not so much what your sister was doing or your brothers was doing. You wanted to do your own thing, type thing. But, Now, being older, you really realize just how great it is to have a sister and someone that cares about you and can keep you straight.

[00:38:31] Bob: And you can take train rides with.

[00:38:32] Penny: Yes. And you can take train rides.

[00:38:34] Nancy: Cares enough for the hard stuff.

[00:38:37] Penny: Yeah.

[00:38:38] Bob: Well, I, I so admire the relationship that you have and I'm really happy that you have each other.

[00:38:43] Nancy: We are too.

[00:38:44] Penny: Yes.

[00:38:44] Nancy: We've both had health issues and we've been there taking care of each other. Over these last seven years, six years that we've been down here, she's been down here with us.

[00:38:55] Bob: And they've agreed to talk with us about everything because there are lessons they want to share.

[00:39:01] Penny: I'd say beware. There's a lot of wolves out there in sheep's clothing. The thing that really gets me is that this all started up for kids raising funds and they had no idea what was going on or what was to become of it. It makes you feel guilty for not wanting to help the kids because they need help. That's, we're teaching responsibility by fundraising and doing things and you feel like. You know, they've taken that away from you that you can't, you got to be careful what you do, who you help.

[00:39:36] Bob: So Nancy, go ahead. What is it you want people to learn?

[00:39:39] Nancy: To be, to be more cautious, to be aware, to not, and it's sad to say to not be naive, but to question everything. You have to look into things. I don't want people to be taken advantage of. They have to learn to stand up for themselves. And the key is to check their bank accounts every month. Go over those statements every month.

[00:40:02] Nancy: So many people now don't get paper statements, and they don't look at their accounts, and things get built up month after month after month. If my sister had allowed me to be part of their information, which, you know, maybe I could have done something years ago to help them, but you've got, buyer beware. You have to be vigilant to guard your own money. Guard what you're doing. You've earned that you've worked so hard for your whole life.

[00:40:28] Bob: I am really glad you said that last bit there, because one thing we talk about a lot is how important it is to ask for help. Not everybody's good at everything, and it's important to talk about money with your family, because somebody else in your family might be able to help you. So thank goodness, Nancy, that you did do this procedure, because it could have gone on for years, right?

[00:40:47] Nancy: Exactly. It could, you know, it still could be going on if there hadn't been a found a way to stop the bleeding. Because that's what it was. It was like a blood loss.

[00:40:59] Bob: Penny, is there anything I haven't asked that you want to talk about?

[00:41:02] Penny: Other than, uh, if you want to help kids, buy doughnuts.

[00:41:08] Bob: Prosecutor Joe Thompson was grateful for Penny and Nancy and their testimony, but also for every victim who took the time to report this crime. Remember, there were a staggering 150,000 victims. And without many of those reports, well, there wouldn't really have been a case.

[00:41:26] Joe Thompson: We rely on people. to report cases. With elderly, fraud against elderly victims, it's especially important. Often we don't hear about those types of crimes or it's hard to. And with consumer protection crimes as well, we are looking for crimes. And when we see reports against companies, we notice. We don't, we can't investigate every crime, but the more complaints we see, the more it pops up, the more likely it is to be investigated. And to the extent it is being investigated, you're more likely to be identified as a victim. Who's entitled to restitution to the extent there's any funds available.

[00:41:58] Bob: You know, this kind of crime sounds, I hate to use this word, but old-fashioned, right? Magazine crimes, subscriptions, whatnot. It sounds like something that maybe had its heyday in the 70s. It's still going on. I read a press release from the Justice Department about a similar case just in May, where someone pled guilty. So these kinds of magazine subscription scams are still happening, right?

[00:42:18] Joe Thompson: Absolutely, and as long as there's people with magazines, there'll be people carrying it out. Maybe it won't be as prominent as maybe it has been in the past, and we charged many of the prom, of the largest companies involved in it in this case, but it's still out there, and people need to be aware when they get when they get things that don't make sense, when they see charges that don't make sense, don't just ignore it. Don't just call your credit card company, you know, call the AG's office, your state AG's office, contact the Better Business Bureau, or contact the FBI.

[00:42:45] Bob: As long as I had Joe on the phone, I wanted to ask him about a gray area that I find, subscriptions that aren't really fraudulent, but aren't really wanted either. Charges on your bank account or your credit card that are a surprise. I wrote a book about this grey area and called it Gotcha Capitalism. There are other words for this practice too, but I wanted to hear from a real prosecutor where the line is.

 [00:43:10] Bob: In my line of work, we often talk about scam light, if you will. I mean, the world is full of people with subscriptions to things they don't really need and many of them wouldn't qualify as a crime. By, you know, your definition, but I think they could, and the fact that so many of those exist, I think, create this gray area that even makes the life of full on scam criminals easier.

[00:43:31] Joe Thompson: Oh, I think that's absolutely right. You know, we, when we charged this case, we were very clear that we weren't charging what we called, what we referred to as gray area telemarketing, telemarketing deals that are not a good deal, that are probably, scammy and unethical in the way you wouldn't want someone calling your mom or your grandma with that offer, but aren't necessarily illegal. They aren't necessarily out and out lying to someone. It's just a bad deal. And people are being talked into it, and maybe there's heavy handed sales tactics and high pressure sales tactics, but they don't cross the line of the fraud. This case involving the magazine fraud scheme, that clearly had crossed the line into black and white fraud. There's a whole host of other types of telemarketing that probably fall short of out and out fraud, but that are still problematic and people should be on the lookout for, for sure.

[00:44:20] Bob: I'm so glad you said that. Without requiring of you a law school dissertation, is there an easy way for you to explain to me what crosses, what makes something cross the line into being a crime?

[00:44:29] Joe Thompson: Well fraud is, as I tell a jury all the time in closing argument, fraud is nothing more than lying to someone to get their money. So if you're lying to someone about what you're giving them or what you're doing for them in order to get them to pay you money that they otherwise wouldn't, that's fraud. Now, there's a real gray area when it comes to puffery, you know, I'm overstating the benefits of what I'm selling you. I'm telling you this is the greatest thing since sliced bread, but it's actually not. It, in my mind, it crosses over when you are telling black and white outright lies. I'm not, you're not exaggerating, you're not puffing, you're lying. So in this case, they were, they said they were calling to check in on someone's subscription and maybe reduce the price of an existing subscription, but that's not at all what they were doing. That's fraud.

[00:45:12] Bob: I have a special place in my heart for the word puffery. Can you define it for people?

[00:45:16] Joe Thompson: Oh boy. I guess it's just a sales version of saying exaggerating. Cars, used car salesman. Uh, I think a new car salesman, salesperson, right? Might tell you how their car, a Toyota, is better than a Ford, and maybe that's true, maybe it's not. Go to a used car dealership, and they're gonna puff a little bit more, probably, at least stereotypically, in telling you this car that's run down is actually great, and it runs great. Maybe it doesn't really run great, but we, we all sort of know this is a salesperson and they're trying to, trying to close the deal. We give them some leeway, and I think that's kind of the concept of puffery in the law. It's a nebulous thing.

[00:45:53] Bob: Puffery is legal, right?

[00:45:54] Joe Thompson: Puffery is legal. You, you want to be aware. If you're a consumer, you want to be on the lookout for it. And I certainly think when it comes to telemarketing, It can be more problematic because a lot of times it's combined with high pressure sales tactics.

[00:46:08] Bob: So if I say I am America's favorite podcast, that's, that's puffery and that's probably legal. If, if I say we've had 10 billion downloads and we haven't, that would be illegal, right?

[00:46:19] Joe Thompson: That's right.

[00:46:20] Bob: Okay, so what is it you want people to learn from this story?

[00:46:22] Joe Thompson: I want people to learn that they don't have to be a victim and that when this happens, There's people they can call, whether it's the FBI, an attorney general's office, the Better Business Bureau, their local law enforcement, and they should do that. When in doubt, reach out. It doesn't take much. There's no cost. We want to hear about these things. And I think people should be vigilant when it comes to their credit cards and bank accounts and looking at those statements and if they see things that look unusual, look into it. It's very easy because it's upsetting to think you might be a victim of a crime and the easiest thing to do is just turn away from it. And I think with fraud schemes like this and telemarketing fraud schemes, the people that carry them out rely on that. They rely on people not wanting to deal with the problem and just turning away from it. And it's almost like it's easier to just pay the money and not have to think about it. But I want people to resist that temptation and to reach out and tell us because it's not just you. There's thousands and tens of thousands, in this case, more than 150,000 people that were victimized all over the country. And so it's not just you, it's others. And if, when people reach out, we can do something about it.

[00:47:24] Bob: I mean, 150,000 people, that's an astonishing number. That's like, like an entire Minnesota Twins series worth of fans.

[00:47:31] Joe Thompson: Absolutely. The numbers are staggering.

[00:47:34] Bob: I know it's annoying to check those bank statements. I know it's annoying to call and cancel, to log in and file those complaints. But, this is the world we live in today. Justice requires it, and so does your bank account. For The Perfect Scam, I'm Bob Sullivan.

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[00:48:00] Bob: If you have been targeted by a scam or fraud, you are not alone. Call the AARP Fraud Watch Network Helpline at 877-908-3360. Their trained fraud specialists can provide you with free support and guidance on what to do next. Our email address at The Perfect Scam is: theperfectscampodcast@aarp.org, and we want to hear from you. If you've been the victim of a scam or you know someone who has, and you'd like us to tell their story, write to us. That address again is: theperfectscampodcast@aarp.org. Thank you to our team of scambusters; Associate Producer, Annalea Embree; Researcher, Becky Dodson; Executive Producer, Julie Getz; and our Audio Engineer and Sound Designer, Julio Gonzalez. Be sure to find us on Apple Podcasts, Spotify, or wherever you listen to podcasts. For AARP's The Perfect Scam, I'm Bob Sullivan.

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