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May 6, 2016

Judge Orders $100,000 Consumer Fraud Default Judgment against New Jersey Man for Role in Defrauding Elderly Iowans

Robert Schneider, d/b/a Schneider Creative, behind fraudulent sweepstakes and psychic mailings that preyed upon susceptible Iowa consumers

DES MOINES – A Polk County judge Thursday ordered the owner of a design services company to pay $100,000 for his role in designing mail solicitations that misled and cheated elderly Iowans.

District Court Judge Lawrence McLellan ordered the default judgment against Robert C. Schneider, doing business as Schneider Creative, of Englewood, New Jersey, following a consumer fraud lawsuit filed in March.

The lawsuit alleged that Schneider’s solicitations enabled scammers to cheat susceptible Iowans on fixed incomes who could not easily absorb the losses.

“The mailings Schneider designed were slick and predatory, intended to trick vulnerable people into sending money,” said Miller. “Schneider was evidently the go-to person for a range of scammers – operators who were ready and willing to defraud the elderly, but who didn’t necessarily have the skills to craft mailings that generated enough victims to be profitable.”

Case Began with Elderly Eastern Iowa Victim
Consumer Protection Division investigators were led to Schneider after learning of a 91-year-old eastern Iowa widow who was the target of a host of fraudulent mail solicitations. Many of the mailings appeared to notify her that she had won a big sweepstakes prize, which would be released to her upon payment of a $25 processing fee. In fact, the $25 was payment for a virtually worthless list of advertised sweepstakes that anyone could enter, and the consumer had won nothing. The woman was depleting her savings as she responded to these mailings by repeatedly sending checks to scammers.

Miller said that Schneider also designed psychic scam solicitations of the sort that helped drain the Iowa woman’s bank account and cheated other older Iowans. The highly personalized mailings typically expressed the supposed psychic’s deep interest in each recipient, and pledged to deliver wealth and protection from harm – for a fee.

Miller’s consumer fraud lawsuit had included an example of a deceptive sweepstakes mailing that Schneider designed for scammers. Titled “Important Advisory,” the mailing appeared to confirm a “prize account balance” of $1,150,000 that would be released to the consumer once the “acquisition form” was submitted along with the “research fee” of $25. Miller noted that a key disclosure that the consumer had “not won any money” was ineffective, buried in a dense block of capital letters on the back of the mailing.

Default Judgment
The default judgment, obtained after Schneider chose not to defend the lawsuit, requires him to pay $50,000 to be used to reimburse Iowa victims, $40,000 as a civil penalty, and $10,000 to repay the state investigation and litigation costs. The judgment further prohibits Schneider from any role in future mailings that violate the Iowa Consumer Fraud Act or misleading Iowa consumers.
“Frankly, we may never see a dime of that,” Miller said. “Although Schneider collected fees from scammers for years, he now claims to have so little money and property as to be judgment proof. That’s a claim we may put to the test.”

General Cautions
Miller cautions Iowans to be wary of mailings highlighting prize winnings, and personalized letters in which so-called psychics promise winning lottery numbers or other good fortune. In particular, caregivers of older Iowans should look out for predatory mailing or telemarketing campaigns making too-good-to-be-true promises.

“We know that scammers buy and sell lists of susceptible people,” Miller warned. “This allows them to zero in on a single Iowan who has shown vulnerability, and they can deplete the victim’s resources pretty quickly.”

For more information or to file a complaint, contact the Consumer Protection Division through the Attorney General’s website at www.iowaattorneygeneral.gov or email directly to consumer@ag.iowa.gov. Consumers can also call the Consumer Protection Division at 515-281-5926, or outside the Des Moines area, toll free, at 1-888-777-4590.

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