Opinion ID: 777749
Heading Depth: 2
Heading Rank: 1

Heading: The Fraudulent Who's Who Scheme

Text: 3 Although Gordon's companies promoted their listings as exclusive collections of leaders in various fields, potential members were actually solicited from ordinary mailing lists. Id. at . Worldwide and Sterling often distributed 100,000 letters at a time. The letters informed potential clients of their nomination for inclusion in one of the available registries even though most recipients were not nominated. Although at the time the letters were sent, the companies knew nothing about the intended recipients, a typical solicitation letter included language indicating that (i) Worldwide or Sterling was a leading publication of accomplished individuals, (ii) inclusion in the registry was limited to exceptional people who were highly successful in their fields, and (iii) inclusion in the registry was without cost to the nominee. An enclosed questionnaire encouraged the recipient to apply for membership. If the nominee responded by filling out a personal information card, telemarketers then contacted the person to conduct a false evaluation interview. During the interview, the marketers read from pitch sheets that laid out false and misleading information aimed at encouraging the customer to join and specified fraudulent answers to common questions. Gordon, 1999 U.S. Dist. LEXIS 183, at -. The marketers stressed the exclusivity of membership and the great networking value membership would provide. Memberships were actually sold to anyone wishing to purchase. 4 After completing the interview, Gordon's sales force would ask the customer to purchase a membership (ranging in price from $75 to $750) and informed the new member of additional perks of joining, such as the opportunity to purchase a CD ROM with registry information, discounts on services from Airborne Express and other providers, and networking seminars. 1 Id. at -. By the end of 1994, over 60,000 people, swept along by Gordon's scheme, had become members of the organizations, netting tens of millions of dollars for Gordon's companies. Gordon v. United States (In re the Seizure of All Funds in Accounts in the Names Registry Publ'g, Inc. ), 68 F.3d 577, 578-79 (2d Cir.1995). Although Gordon claimed that his registries were composed of leaders in the international business community, many actual members were employed outside the big business arenas his promotional materials implied. Among the members of one registry were the manager of a Florida rental car agency, the owner of a Florida Dairy Queen, a nutritionist at a Virginia state prison, a Virginia high school teacher, a Massachusetts candy store owner, the manager of a Connecticut Radio Shack, and the manager of a Pennsylvania department store beauty salon. 5 Notably, the employees of Worldwide and Sterling had no misconceptions about the true nature of the memberships they sold. The Worldwide employee assigned to review applications after conclusion of the telephone interviews admitted that she, at Gordon's instruction, regularly altered members' job titles so that the members would appear more prestigious in the publication, for example, listing the owner of a business as a President with expertise in Corporate Management, or a store manager as an area manager or operations manager, and making even small operations sound like large corporations. Furthermore, while telling potential customers that they, as nominees, were the creme de la creme or that the marketers rarely spoke with people who weren't multi-billionaires or CEO's, Gordon's employees, among themselves, considered it a running joke that anyone with a credit card could become a member of one of the registries. 6 At trial, the government presented twenty-three member witnesses who almost uniformly agreed that had they realized that the memberships they were offered were not prestigious, nor had they been nominated by their peers, they would not have been willing to pay for a membership and might not have purchased a membership at all. Even Gordon admitted that the value of his product lay in its appeal to customer egos.