It emerged yesterday (Wednesday) that on or around April 19 McDonald's settled a consumer class action suit in respect of the multimillion-dollar sweepstakes scam masterminded by a former Simon Worldwide employee – director of security Jerome P Jacobsen – who last month pleaded guilty to federal charges of conspiracy and mail fraud.
The settlement remains pending the outcome of a second class action suit, both of which will be funded by Simon’s liability insurer. On completion of the consumer suits, Simon will be protected against any other claims arising out of the fraud.
The $24 million (€27.36m; £16.75m) fraud related to a number of promotional games Simon ran for McDonald’s. Jacobson, said the be the ringleader in a ‘gang’ that included fifty indicted accomplices, systematically defrauded McDonald’s over a period of a dozen years.
Including Jacobson, twenty-nine of the defendants have pleaded guilty to date, although none have yet been sentenced. Jacobson could be jailed for up to fifteen years.
Meantime, Simon has filed a lawsuit against three accountancy firms, KPMG, PricewaterhouseCoopers and Ernst & Young. The suit charges that they failed in their agreement to supervise the distribution of the fast food giant’s Monopoly game pieces, each collectively worth $1 million, allowing some to be misappropriated by a former Simon employee.
Backlash from the affair has driven Simon Worldwide to the verge of bankruptcy [WAMN: 02-Apr-02].
Data sourced from: AdAge.com; additional content by WARC staff