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Oregon AG sues White City company over subscription scam

The state of Oregon is suing 19 companies and nine people in what Oregon Attorney General Ellen Rosenblum says is a nationwide newspaper and magazine subscription scam based in White City.

Rosenblum says the racketeering and unlawful trade practices lawsuit against the companies and individuals stems from a "sophisticated mail scam" that ripped off thousands of Oregonians and people in other states. The 46-page complaint, filed Tuesday in Marion County Circuit Court, says the accused companies and individuals inflated subscription prices on materials anywhere from 40 to 100 percent, bilking in excess of $20 million from consumers since January 2010.

The companies involved allegedly operated under a variety of names, including Liberty Publishers Service Inc., Express Publishers Services Inc., Publishers Payment Processing Inc., and Associated Publishers Network Inc. Individuals named in the suit are Jeffrey Hoyal, Noel Parducci, Laura Lovrien, Colleen Kaylor, Shannon Bacon, Lydia Pugsley, William Strickler, Linda Babb and Rachel Worcester.

The defendants are alleged to have committed wire fraud, mail fraud, first-degree aggravated theft by deception and money laundering, according to Rosenblum's suit.

The lawsuit accuses the parties and companies of sending out millions of misleading mail solicitations designed to trick customers into paying inflated subscription prices, and the mailers falsely suggested peoples' current subscriptions were about to expire. Proceeds were then laundered "through a criminal enterprise that involves dozens of people and entities," the complaint alleges.

"Consumers thought they were dealing with legitimate companies and that they were paying the lowest available price," a release from the Attorney General's office says. "Instead, they sent payments to a dishonest third-party who pocketed the money."

Additional suits were filed in New York, Minnesota, Missouri and Texas, the release says. The Oregon Department of Justice has also obtained a temporary restraining order, freezing bank accounts and halting company business.

The Better Business Bureau representing Alaska, western Washington and Oregon had received more than 800 complaints from across the country over a three-year period, triggering an "F" rating by the BBB and an investigation by Rosenblum's office. Several newspapers alerted their customers to the scam in articles and house ads.

Reach reporter Ryan Pfeil at 541-776-4468 or rpfeil@mailtribune.com. Follow him at www.twitter.com/ryanpfeil.

Read the full complaint here. 

DOJ complaint against White city company by Mail Tribune