Eight Arrested for Defrauding McDonald's Corp. and its Customers in Promotional Prize Contests

Arrests Made in Georgia, South Carolina, Florida, Texas, Indiana and Wisconsin as Part of Nationwide Operation "Final Answer"

WASHINGTON, D.C. – The Department of Justice and the Federal Bureau of Investigation today announced the arrests of eight individuals involved in a nationwide scheme to defraud the McDonald's Corporation and its customers by fraudulently manipulating McDonald's promotional prize contests. The individuals, including an employee of the marketing firm that administers the promotions who embezzled winning game pieces, are charged with fixing the outcome of McDonald's contests--"Monopoly," "Who Wants to be a Millionaire," and other McDonald's promotional games--by controlling the distribution of the high value prize pieces, such as $1 million grand prizes. More than $13 million worth of grand prizes have been corruptly "won" by the co-conspirators in the scheme.

The investigation, called operation "Final Answer," is continuing. McDonald's provided essential assistance in the investigation and has cooperated fully with the FBI and the United States Attorney's Office in the Middle District of Florida.

Those arrested today are:

• Linda L. Baker, 49, of Westminster, South Carolina;
• Noah D. "Dwight" Baker, 49, of Westminster, South Carolina;
• John F. Davis, 44, of Granbury, Texas;
• Andrew M. Glomb, 58, of Fort Lauderdale, Florida;
• Michael L. Hoover, 56, of Westerly, Rhode Island;
• Ronald E. Hughey, 56, of Anderson, South Carolina;
• Jerome P. Jacobson, 58, of Lawrenceville, Georgia; and
• Brenda S. Phenis, 50, of Fair Play, South Carolina (currently in Indianapolis, Indiana);

All of the individuals are charged in felony complaints with conspiracy to commit mail fraud, which was filed in the U.S. District Court for the Middle District of Florida, Jacksonville Division.

"This fraud scheme denied McDonald's customers a fair and equal chance of winning," said Attorney General John Ashcroft. "Those involved in this type of corruption will find out that breaking the law is no game."

The scheme began as early as 1995, the complaint said. Simon Marketing Inc., headquartered in Los Angeles, was contracted by McDonald's to administer its promotional games. In producing and distributing the high-value game pieces, Simon is responsible for insuring the integrity of the promotional games. After the game pieces are produced, they are supposed to be legitimately distributed, providing customers a random chance of winning. However, prior to distribution, a Simon employee embezzled the winning high-value game pieces and conspired to have individuals fraudulently claim to be winners.

The complaint alleges that Jerome Jacobson, an employee in the security department of the Lawrenceville, Georgia office of Simon Marketing, and other persons outside of Simon, were the ultimate distributors of the prize pieces for the promotional games. The government alleges that Jacobson provided the winning game pieces to friends and associates who acted as "recruiters." These "recruiters" then solicited individuals who falsely and fraudulently represented that they were the legitimate winners of the McDonald's game. After the "winners" received prize checks from either Simon or McDonald's, the "winners" shared a portion of the proceeds with their recruiters, who in turn, provided a portion of the proceeds to Jacobson. High-value game pieces include cash prizes of up to $1 million.

The government alleges that Noah D. "Dwight" Baker, Linda L. Baker and Glomb functioned as "recruiters" and Davis, Hoover and Phenis "won" between $500,000 and
$1 million each. Hughey was a "recruiter" and also "won" a cash prize of $1 million.

The complaint states that Davis, who was recruited by Dwight Baker and Hughey, claimed a $1 million prize in the 2001 "Monopoly" game; Hoover, who was recruited by Glomb, claimed a $1 million prize in the 2001"Monopoly" game; Hughey, who was recruited by Dwight Baker, claimed a $1 million prize in the 2001 "Who Wants to be a Millionaire" game; and Phenis, who was recruited by Dwight Baker, claimed a 2001 $500,000 prize in the "Who Wants to be a Millionaire" game. "This investigation has required the utilization of some of the most sophisticated and innovative investigative techniques available and the assistance of FBI personnel in dozens of cities across the country," said Thomas J. Pickard, Acting Director of the FBI. "This case serves as a resounding example of the fine work conducted by the FBI."

This investigation was originated and conducted by the Jacksonville, Florida, Office of the FBI, in conjunction with the U.S. Attorney's Office for the Middle District of Florida. The investigation also involved significant contributions by FBI field offices in Columbia, South Carolina, Atlanta, Georgia, Memphis, Tennessee, Boston, Massachusetts, and Indianapolis, Indiana, Dallas, Texas, Miami, Florida, Chicago, Illinois, as well as other FBI offices.

Conspiracy to commit mail fraud is a violation of Title 18 U.S. Code, Section 1341, which is a violation of Title 18, U.S. Code, Section 371. The maximum penalty for committing a single count of conspiracy to commit mail fraud is five years imprisonment and a $250,000 fine and restitution.

A complaint is merely an accusation that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent until, and unless, proven guilty.