Federal Indictments Returned in Las Vegas Against Husband and Wife for Marketing Scam
Las Vegas, Nev. - Daniel G. Bogden, United States Attorney for the District of Nevada and Robert N. Carwell, Team Leader of the U.S. Postal Inspection Service for Las Vegas, Nevada, announced that DONALD J. MIKRUT and SUE ANN MIKRUT, ages 54 and 56, respectively, and residents of Las Vegas, Nevada, have been charged by the federal grand jury in Las Vegas with Conspiracy, Mail Fraud, Wire Fraud, Money Laundering, and Aiding and Abetting, for allegedly participating in a scheme to defraud persons of fees they paid to a marketing company owned and operated by the defendants.
The Indictment, returned on August 13, 2002, but unsealed on September 4, 2002, states that DONALD MIKRUT owned and operated American Business Publications, Inc., a publishing and marketing corporation located in Las Vegas. SUE ANN MIKRUT, the wife of DONALD MIKRUT, was at various times editor, executive assistant, vice president and general manager of American Business Publications, Inc. DONALD MIKRUT wrote a book, "How To Make America Strong & Wealthy One Person At a Time", which he distributed through the mail to hundreds of thousands of persons throughout the United States. In the book, DONALD MIKRUT solicited persons to join a "multi-level marketing" company, Financial Independence Network Limited. "Multi-level marketing" is a system of selling goods and services through independent distributors. The distributors typically receive commissions for their sales of company products and also for the sales of products by additional persons they recruit to join the company. Beginning in 1995, Financial Independence Network Limited marketed several money-making "programs", such as "The Thirteenth Check Program" and "Pick Your Monthly Income Program." DONALD MIKRUT advised customers that if they would pay him a one-time "marketing fee" of $60 to $24,000, he would perform their recruiting responsibilities and get other persons to join up. DONALD MIKRUT advised his customers that the more they paid, the more they could earn. DONALD MIKRUT advised that they could earn each month for the rest of their life the amount of the "marketing fee" they paid to him. Customers were also told they could receive full refunds of their marketing fee at any time if they were not satisfied.
Beginning in 1997, DONALD MIKRUT ceased marketing the Financial Independence Network Limited and started marketing two other companies, Secure Independence, and Partners For Life, which sold various health care products and information. MIKRUT promoted these two companies through a 32-page letter and a book entitled "Free Money", and advised customers they would have to pay a monthly subscription to join and could choose to have him do the marketing for them or they could do their own marketing by distributing his "Free Money" book.
According to the Indictment, DONALD MIKRUT and SUE MIKRUT induced persons to join the companies by making false representations and promises, such as: customers would receive refunds for the all of the monies they contributed, when the defendants knew that they were incapable of refunding the investments; by stating in promotional materials that 50,000 persons had joined one of the companies in the last 90 days, when the defendants knew that 50,000 persons had not joined in the last 90 days; by failing to tell customers that the monies they invested would not be used to build the businesses and income of the customers, but instead would be used to pay refunds of other customers; by stating that testimonials in the books were from satisfied customers, when many of the testimonials were from paid consultants and persons solicited by DONALD MIKRUT in past programs; by stating that one of the programs was generating large sales when the defendants knew that it had generated very few new customers; and by stating that 300,000 copies of a book entitled "Your Patriotic Duty to Become Wealthy" would be mailed out, when the defendants knew that such a book did not exist. In 1996, when numerous customers requested refunds, and the companies could not meet the guarantee, the MIKRUT's started advising customers to join other companies they promoted; to not request refund checks because they were going to miss out on a lot of money; and to invest additional monies in the programs which were in excess of their agreements.
The Indictment states that as a result of these activities and misrepresentations, DONALD MIKRUT and SUE ANN MIKRUT diverted more than one million dollars from the funds received from their customers for their personal use and benefit. The Indictment alleges that approximately 50,000 persons became victims of the fraud and that they lost more than 30 million dollars.
The defendants are facing up to five years in federal prison and a $250,000 fine for the Conspiracy charges; five years in prison and a $250,000 fine for each the Mail Fraud and Wire Fraud charges; and ten years in prison and a $250,000 fine on the Money Laundering Charges. The actual sentence will be dictated by the United States Sentencing Guidelines, which take into account a number of factors, and will be imposed in the discretion of the Court.
The case was investigated by the U.S. Postal Inspection Service and prosecuted by Assistant United States Attorney, Sharon Lever.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.