I-TEAM: Swindled seniors seek justice after $300M stolen over 20 years
LINCOLNTON, Ga. (WRDW/WAGT) - Federal prosecutors in Minnesota are wrapping up a trial that involved companies taking more than $300 million from seniors across the country.
Those victims were typical seniors or other vulnerable individuals.
For Penny Mashburn and her family, nearly $70,000 could’ve been life-changing money. It could’ve helped with medical bills and living expenses.
Mashburn didn’t always live in Lincolnton with her sister, Nancy Stowe. It was a breast cancer diagnosis in 2019 and her husband’s death that led Mashburn to make the 110-mile trip to be with her sister.
“She would sometimes just say, ‘You know, I’m really struggling,’ and I would loan some money or whatever needs to be done. And I always wondered why she had financial difficulty,” said Stowe.
While sorting family finances, something caught Stowe’s attention on her sister’s bank statements.
“MP Readers: $1,396.50, United Reader Service: $2,363.05,” reads Stowe.
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She was reading off a piece of paper that lists dozens of companies with a total amount of money next to it.
“National Readers Service: $1,322.90, Readers Club of America: $1,213.80,” said Stowe.
These companies were siphoning thousands of dollars every month out of Mashburn’s account.
“For the grand total of $68,829.02 that was stolen from my sister,” said Stowe.
So, how did all of this begin? When Mashburn lived in North Carolina, some kids were trying to make money selling magazines for their school. Mashburn ordered a cat magazine and Sudoku. It wasn’t until she started receiving her periodicals that things went south.
“All of a sudden, I would get a phone call saying, ‘We’re the magazine company that sends you your magazines. How are they coming? Are they in good shape? Are they coming on time?’ And they want to know if you wanted the others or they would suggest some. ... I said, ‘No, I don’t want it right now. Thank you anyway.’ But the next thing I knew, next month I would get a different magazine and didn’t pay attention to it,” said Mashburn.
From 2014 to 2019, fake magazine companies were able to get Mashburn’s bank account information. That information was bought and sold from one company to the next.
Now, a series of federal cases in the District of Minnesota is charging more than 60 people in a telemarketing scam, called a magazine scam, that swindled seniors and other vulnerable victims of more than $300 million.
“They would call, and they say, ‘Well, we were the company that sent you your magazines and we noticed that you were a senior citizen, and we need to give you a different price to save so much money.’ And so I agreed to it. And the next thing I know, here comes some more magazines,” said Mashburn.
Federal documents say the companies carried out their scheme by calling victims who had one or more magazine subscriptions, offering to give them a cheaper price. The federal lawsuit says they were not calling from the magazine companies, and they were not calling to reduce the cost of an existing subscription.
Instead, companies were tricking the victims into signing up for entirely new magazine subscriptions they did not want and often could not afford, according to prosecutors.
Will: “What do they characterize your sister in this case?”
Stowe: “As a mega-victim.”
Mashburn was one of the few victims who lost more than $50,000.
Some companies would call victims, including mega-victims, claiming they were calling from the cancellation department. The caller would offer to cancel the magazines and pay off any balance owed, in exchange for a large one-time payment.
Will: “What was your initial reaction when you started compiling that list and seeing all of these charges?”
Stowe: “I was pissed off. I told her, I said, ‘I cannot believe that you allowed this amount of money to come out of your account.’”
The original fundraiser was legitimate, but Stowe says kids are the ones opening up vulnerable people to this scam.
“My sister, because of her circumstances, just ended up being hit harder and for more money than other people,” said Stowe.
Still today, magazines continue to show up in her mailbox every month. Some of the magazine contracts last through 2030.
“Magazines were everywhere. And I wondered, ‘What in the world is she doing? What is she doing with all of these magazines?’ So, I guess I would have to say we’ve gotten enough magazines and enough trees killed to sink a boat,” said Stowe.
Mashburn and Stowe both traveled to Minnesota, where this case is being tried. They both testified in federal court.
They’ve filed for restitution, but there’s no guarantee what – if anything – they’ll get back.
“You think, ‘Well, they can’t scam me,’ but they’re out there and they’re good. They know what to do and they have no conscience or concern as to how it affects other people, what they do, and what they take from you,” said Mashburn.
What they took from Mashburn was essential. After her husband passed away, she was dealing with medical bills from fighting breast cancer.
“If we can help anybody from saving $25, that’s a victory that’s not going in their pockets,” said Stowe.
So, how do you protect yourself from a scam like this?
Some marketing companies do sell your personal information and buying history to other companies. In this case, scammers bought Mashburn’s information and created companies. Once they had her credit card information, the charges continued.
If you spot any unusual charges on your credit card, dispute them with your credit card company.
In Mashburn’s case, scammers were all found guilty of mail and wire fraud.
Another I-TEAM investigation ...
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