While billions were being served, it turns out some were helping themselves.
For the last six years, a Georgia man entrusted with guarding winning game tickets for McDonald's restaurants sold them off to acquaintances instead in a complex scam that allowed a loose-knit band of thieves to walk away with more than $13 million in top prizes, federal officials said yesterday.
The FBI arrested eight people in seven states yesterday, alleging that they and at least 16 others pocketed the top prizes in "Monopoly," "Who Wants to Be a Millionaire?" and other games used by the world's largest restaurant chain to attract customers.
Investigators alleged that the plot was masterminded by Jerome P. Jacobson, 58, of Lawrenceville, Ga., an employee in the security division of Los Angeles-based Simon Marketing Inc. The company had run promotions for McDonald's for more than 20 years, but the chain severed the relationship yesterday.
Jacobson is being held on $1 million bond. Telephone calls to his home yesterday went unanswered.
Court papers show the alleged con artists used fake addresses, bogus telephone numbers and other tricks to claim prizes from New Hampshire to Florida.
Jacobson, one of a handful of people with access to the restaurant chain's biggest prize pieces, allegedly used acquaintances as recruiters, who in turn found friends and relatives willing to pose as winners. In exchange, they gave Jacobson and his intermediaries part of their winnings, investigators said at a briefing yesterday.
In one example cited in court papers, Jacobson was slated to receive $70,000 of a recent $500,000 prize, with the rest going to the recruiter, the fake winner and taxes.
The conspirators, including 16 people who have not been arrested, had cashed in at least 13 separate $1 million tickets since 1995. They claimed smaller cash awards that totaled $800,000 and a Dodge Viper sports car that was given away in 1995, the FBI said.
The $1 million prizes were usually doled out in $50,000 annual increments, with Jacobson pocketing the first year's check, officials said. But some participants in the scam allegedly mortgaged their homes to pay Jacobson upfront for winning tickets.
More arrests are likely, FBI officials said.
"This fraud scheme denied McDonald's customers a fair and equal chance of winning," Attorney General John D. Ashcroft said at a press conference yesterday. "Those involved in this type of corruption will find out that breaking the law is no game."
At a District McDonald's yesterday afternoon, Mohamet Diop, 24, of New Carrollton, said a rigged game is unfair to customers.
"People expect to get something from the games, especially the kids," Diop said. "When they find out it's all fake, then it's not right."
The FBI's Jacksonville, Fla., office was tipped off by an unidentified informant more than a year ago, and McDonald's Corp. was notified of the complaint in May 2000, FBI officials said. But they acknowledged that the report was initially viewed skeptically.
In the last stages of the investigation this year, McDonald's agreed to run its annual "Pick Your Prize Monopoly" contest with the knowledge that those under surveillance would attempt to steal the largest prize, the FBI said. Monopoly, based on the Hasbro Inc. board game, ran from July 11 to Aug. 9.
The winning ticket was claimed by John F. Davis, 44, of Granbury, Tex., who was arrested yesterday after allegedly being recruited by another defendant, Ronald E. Hughey, of Anderson, S.C. Four of the eight suspects are from South Carolina, officials said, with the others from Florida, Texas, Georgia and Rhode Island. Two of the unnamed participants are from Front Royal and Fredericksburg.
"The goal was to catch these guys red-handed, and that's what we did," said Walt Riker, a McDonald's spokesman. "We hope Americans will see that we were innocent victims along with our customers, and we got scammed by a sophisticated web of crooks."
Justice Department officials stressed that no McDonald's employees were implicated.
The long-running scam began in 1995, the FBI said, when Jacobson allegedly provided a winning Monopoly ticket, through an intermediary, to the owner of an adult nightclub in Statesboro, Ga. The club owner, who was not identified or arrested yesterday, claimed a 1996 Dodge Viper as a prize, officials said.
What followed during the next six years was an increasingly ambitious and wide-ranging scheme to cash in winning tickets allegedly stolen by Jacobson, according to FBI officials and court documents.
The tickets were kept under tight security. They were produced by a printing company in Atlanta and then put in the custody of Jacobson and an unnamed accountant, who traveled the country placing the high-value tickets on drink cups and in Sunday newspapers, court documents allege. Officials declined to say whether the accountant is also a suspect.
Plans were already in the works to hijack another contest in 2002, officials said.
But McDonald's announced yesterday it will launch one of its largest contests yet in a bid to reassure customers. The company will give away five $1 million prizes and 50 $100,000 prizes from Aug. 30 through Sept. 3.
The new giveaway is needed, said CEO Jack M. Greenberg, "to right this wrong."
Staff writer Abhi Raghunathan and researcher Madonna Lebling contributed to this report.