In August 2001, it was discovered that the McDonald’s Monopoly game was a fraud. Simon Marketing, which ran the game on behalf of McDonald’s was responsible for the fraud. An investigation was initiated pursuant to a confidential tip. The investigation was led by the Federal Bureau of Investigation and dubbed Operation “Final Answer”. During the investigation to uncover the fraud, the FBI used several different forms of surveillance. In this paper I will describe how the actual fraud was committed and subsequent aftermath of the investigation. Case Study
The McDonald’s Monopoly game fraud was discovered in August of 2001, when it was revealed that certain employees of Simon Marketing and associates had colluded to defraud the McDonald’s Corporation in excess of $13 million worth of game prizes over the promotion period (Albrecht et al, 2012, p.210). The Simon Marketing firm was contracted by McDonalds to run their promotional sweepstakes games. The game prizes consisted of cash, vehicles, vacations and/or food prizes. According to Richard Dent (FBI Special Agent in Charge), the main players involved in the scheme were as follows; 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); (Anonymous, 2001, para. 2).
The fraud began sometime in 1995 when Jerome Jacobson, a long time game security manager for Simon Marketing masterminded one of the biggest promotional contests ever held. His job was to travel around the country and randomly place peel off game stickers on soft drink cups and food containers within McDonald’s restaurants and to insert instant winners inside magazines and Sunday newspaper circulars. However, instead he devised his own kickback scheme where he embezzled winning game tickets and then sold them to pre-arranged winners for $50,000 or more in kickbacks (Albrecht et al., 2012, p.210). McDonald’s ultimately rectified the situation to satisfy customer opinion of their products by booting Simon Marketing and promised to take future steps to make sure this doesn’t happen again. McDonald’s also launched other games and promised to give customers a real chance of winning (Siemasko, 2001, para 5-6).
The Federal Bureau of Investigation conducted an investigation into the McDonald’s Monopoly game fraud and subsequently arrested and indicted the above aforementioned eight persons, who were charged with Mail Fraud, a violation of Title 18, United States Code, Section 1341 and Conspiracy, a violation of Title 18, United States Code, Section 371 (Dent, 2001, p.31-32). In my opinion, the criminal outcomes did not fit the actual crimes committed. The suspects were charged with conspiracy to commit mail fraud, which carries with it a maximum penalty of five years in prison and a $250,000 fine (Siemasko, 2001, para 17). When a fraud incident occurs, the organization must prosecute to the fullest extent to send a strong message that this type of behavior will not be tolerated. The courts have a responsibility, to sentence people accordingly and not treat them with “kid gloves” as a slap on the wrists will empower to them to continue with future fraudulent incidents.
The fraudulent scheme was detected when a confidential informant reported the scam to the Federal Bureau of Investigation. I don’t believe that Simon Marketing did much to prevent this type of fraud from occurring. It appears that Simon Marketing was extremely lax in there control activities. According to Albrect et al, the following five primary control procedures are necessary; 1. Segregation of duties, or dual...