Owners Of Miss Cleo Hotline Indicted By Grand Jury
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OWNERS OF ONCE-POPULAR PSYCHIC COMPANY INDICTED BY GRAND JURY
By Michael D. Sorkin
St. Louis Post-Dispatch
Monday, September 30, 2002
ST. LOUIS - Some 6 million people called late-night TV psychic Miss Cleo,
and the companies that operated her hot line are swamped with civil fraud
complaints. Now, for the first time, the companies are facing criminal
The St. Louis Post-Dispatch has learned that a grand jury in St. Charles
County, Mo., returned a suppressed indictment Sept. 13 charging the
companies and their two principal owners with criminal fraud.
If found guilty, the owners could face a maximum of 10 years in prison and
fines of $10,000, in addition to $20,000 in fines for their companies.
Indicted are Steven L. Feder, 52, and Peter Stolz, 54, both of Fort
Their companies are identified as Access Resources Services Inc., a Delaware
corporation also doing business as Miss Cleo, Mind and Spirit, Psychic
Readers Network and A Real Communications Services Inc., and a second
company, Psychic Reader Network Inc., a Florida corporation.
The defendants are scheduled to be arraigned in circuit court in St. Charles
on Wednesday. One of their lawyers, former U.S. attorney Ed Dowd, said he
could not comment on the charges.
"No plea agreement has been finalized," he added.
Miss Cleo herself was a paid employee and was not charged. Instead of a
psychic with a Jamaican accent -- as the TV ads portrayed -- she turned out
to be a sometime playwright and actress from Los Angeles named Youree Dell
Harris, now living in Florida.
The Federal Trade Commission and at least nine states have investigated the
companies. All their allegations have a similar ring -- that callers never
got to speak to Miss Cleo or any "psychic," and that they were duped into
staying on the line as they ran up phone bills of $4.99 a minute.
Government investigators estimate that hot line callers got $1 billion in
bills_half of which were fraudulent and should be returned. The FTC is
negotiating a settlement that would put the companies out of the psychic
Missouri Attorney General Jay Nixon filed two suits last year accusing the
psychic hot line of false advertising, civil fraud and violating the state's
no-call law. After filing the suits, the state continued investigating for
more than a year as prosecutors uncovered additional evidence they say shows
that the hot line's operators were continuing to violate fraud laws long
after they signed pledges in civil cases to stop.
That's when the prosecutors decided to seek criminal charges.
One investigator said they wanted to go the extra step to ensure that
presidents of companies will go to jail if they allow fraudulent conduct to
The indictment lists two victims from among more than 300 complaints filed
by Missouri residents: Julie Mercurio and Alan Vandiver, both from St.
According to prosecutors, Vandiver got $200 in bills for calls he never
made. He told the company that he never had the number the calls were made
from, but the company continued to demand payment.
Mercurio's story was similar to thousands of other hot line callers: After
getting a solicitation for five free minutes with a psychic, she called a
toll-free 800 number that was widely advertised on late-night television.
She was directed to call a 900 phone number where the fee was $4.99 per
Mercurio said she was calling for her free consultation. She never got it.
Instead, she was kept on the line for an hour after which she heard a
recorded message saying her time had expired. Her call was abruptly
A month later, she got a bill for more than $300.
She called to complain -- and was billed $14 for that call.
Prosecutors say the companies bilked Missouri residents out of $18.8
Investigators found that the companies originally hired people they called
in-house psychics. But as the business grew along with Miss Cleo's fame, the
companies hired people off the street and were encouraged to keep callers on
the line for at least 20 minutes.
The companies turned over dozens of memos to prosecutors in which company
officials told workers to stop all fraudulent acts.
Had they stopped, it would have stayed civil, one investigator said.
Miss Cleo went off the air last spring. Callers to her old 800 number are
told that the line has been disconnected.
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