2 people convicted in a case involving 64 people and a dispute over $300 million

Two men are going to prison after the Justice Department found that they and 62 others defrauded older Americans of millions of dollars over two decades in a nationwide magazine subscription scam.

Anthony Eugene Moulder of Fort Myers, Florida, and Abdou-Rahmane Diallo were sentenced for their involvement in a $300 million telemarketing fraud scheme that targeted the elderly and otherwise vulnerable across the country, U.S. Attorney Andrew Luger announced. Both previously pleaded guilty.

The U.S. Attorney's Office in Minnesota called the scam a “magazine scam” and set up a website where victims can recover stolen funds and report their crimes.

Their convictions complete only a portion of the 64-member agency's investigation into the 20-year-long fraud scheme that defrauded more than 150,000 victims, according to the DOJ. The defendants were charged with conspiracy, mail fraud, wire fraud and violating the Senior Citizens Against Marketing Scams Act of 1994. The defendants came from 14 states, Canada and the Philippines.

Moulder was sentenced to 10 years in prison for conspiracy to commit mail fraud, according to court records. Diallo was sentenced to seven and a half years in prison for two counts of wire fraud, according to court records.

The FBI and the U.S. Postal Inspection Service uncovered the scheme in 2020. The investigation resulted in 58 guilty pleas, three people were found not guilty and three people were found guilty at trial, according to court records.

Group creates fake termination services

In charging documents, prosecutors alleged that Moulder purchased “lead lists” containing information about people who subscribed to magazines. He then directed his sales team to use fraudulent sales scripts to coerce victims into making large or recurring payments to Moulder's four Florida companies. Through this scheme, Moulder swindled nearly $86.6 million from 2008 to 2020.

According to prosecutors, Diallo was co-owner of a Canadian company called Readers Services, which targeted people who had previously been defrauded by magazine publishers and who received ongoing bills from those companies.

Diallo posed as an employee of the cancellation department of a magazine and offered victims large lump sum payments to settle outstanding amounts in order to cancel their subscriptions.

“In fact, the victims owed no money to the defendants or their companies,” court documents say. “And the defendants had neither the power nor the ability to cancel the victims' existing magazine subscriptions or any outstanding balances with other magazine companies.”

The victims of the termination fraud were robbed of $30 million.

A widespread program specifically targeted older, vulnerable people

In an October 2020 complaint, 43 people were charged. United States v. Rahm et al.and claimed they posed as employees of the victims' existing magazine subscription companies, according to U.S. District Court documents. In the calls, the defendants made fraudulent offers to victims to lower their rates and instead signed them up for new, expensive subscriptions from 2000 to 2020.

At one point, some victims were paying monthly fees of over $1,000 for the services. The suspects in the scam were accused of stealing more than $300 million from over 150,000 victims who they knew were older and more vulnerable.

“The company owners, call center managers, telemarketers and lead brokers all knew that many of the consumers on these lists were older and vulnerable to deceptive and misleading sales tactics,” the indictment states. “Nevertheless, the defendants called the people on these lists and persuaded them to sign up for expensive magazine subscriptions.”

According to a separate indictment from October 2020 United States v. Timmerman et al.In that indictment, the FBI and the U.S. Postal Inspection Service alleged that nine people posed as telemarketers and tricked victims into making large payments by making them seem sympathetic and pretending to help them cancel the fraudulent subscriptions they had been dealing with for years. In that indictment, prosecutors alleged they defrauded more than 20,000 victims of approximately $30 million from 2011 to 2020.

None of the subscriptions were canceled and the balances with other companies remained.

“In other calls, they became aggressive and threatened legal action or other consequences if the victim consumer did not make the payment,” the indictment states. “In both cases, the script exploited the desperation and fear of the elderly and other vulnerable victims who were caught in the vicious cycle of fraud.”

In the final indictment of October 2020 USA v. Mathias et al., Eight of them were charged with defrauding more than 13,000 victims of approximately $4.5 million from 2010 to 2020. The Justice Department charged Wayne Dahl, Michael Oelrich, Carol Olberg and Jeremy Wilson in separate trials for their roles. Wilson was the last defendant to plead guilty in the scheme.

“The greed of scammers targeting seniors knows no bounds,” said FBI Special Agent in Charge in Minneapolis Michael Paul in October 2020.

Contact reporter Krystal Nurse at [email protected]. Follow her on X, formerly Twitter,@KrystalRNurse.

2 people convicted in a case involving 64 people and a dispute over $300 million

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