Mc Donald's Fraud
Like many merchants, McDonald's offered sweepstakes to draw customers into its restaurants. Laws generally forbid a company from administering its own contests, in order to prevent fraud and to ensure that all prize money is paid out. McDonald's had a relationship with Simon Worldwide Inc., which was responsible for the distribution of the contest pieces, and the payment of major prizes.
In 2000, the US promotion was halted after fraud was uncovered. A subcontracting company called Simon Marketing (a then-subsidiary of Cyrk), which had been hired by McDonald's to organize and promote the game, failed to recognize a flaw in its procedures, and the chief of security, Jerome P. Jacobson,[1] was able to remove the "most expensive" game pieces, which he then passed to associates who would redeem them and share the proceeds. The associates "won" almost all of the top prizes between 1995 and 2000, including McDonald's giveaways that did not have the Monopoly theme. The associates "netted" over $24 million. The scheme was uncovered when one of the participants informed the Federal Bureau of Investigation on its ringleaders. While the fraud was perpetrated without McDonald's knowledge, the McDonald's Corporation voluntarily attempted to rectify the situation by issuing payouts to new (legitimate) winners, awarding five $1 million annuity prizes, and fifty $100,000 prizes over a five-day period.[1]
While the fraud appeared to have been perpetrated by only one key employee of the promotion company, and not by the company's management, eight people were originally arrested, leading to a total of 21 indicted individuals.[2] The relationship between McDonald's and Simon Marketing broke down in a pair of lawsuits over breach of contract, eventually settled out of court, with McDonald's' claim being thrown out and Simon receiving $16.6 million.[3] Although McDonald's was not involved in the fraud, it came under much criticism for what appeared to be lax oversight of the promotion company.[citation needed]
In 1995, St. Jude Children's Hospital in Memphis, Tennessee received an anonymous letter postmarked Dallas, Texas, containing a $1 million winning game piece. Although game rules prohibited the transfer of prizes, McDonald's waived the rule and is making the $50,000 annual payments.[4] Investigations later indicated, and Jacobson himself admitted, that he had sent the winning piece to the hospital.[5]
http://en.wikipedia.org/wiki/McDonalds_Monopoly#Fraud
