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Owners Of Miss Cleo Hotline Indicted By Grand Jury

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    NHNE News List Current Members: 829 Subscribe/unsubscribe/archive info at the bottom of this message. ... OWNERS OF ONCE-POPULAR PSYCHIC COMPANY INDICTED BY
    Message 1 of 1 , Oct 8, 2002
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      NHNE News List
      Current Members: 829
      Subscribe/unsubscribe/archive info at the bottom of this message.

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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

      http://www.aberdeennews.com/mld/aberdeennews/news/nation/4184805.htm

      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
      charges.

      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
      Lauderdale, Fla.

      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
      business permanently.

      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
      continue.

      The indictment lists two victims from among more than 300 complaints filed
      by Missouri residents: Julie Mercurio and Alan Vandiver, both from St.
      Charles.

      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
      minute.

      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
      terminated.

      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
      million.

      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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