Larimer woman to plead in $2M magazine scam
A Larimer woman pleaded guilty to fraud on Tuesday in what federal prosecutors say was a $2 million scheme to sell phony magazine subscriptions door to door using sob stories claiming the sales benefited the military, children's hospitals, single mothers or ex-cons looking to turn over a new leaf.
Lahron Buchanan, 32, must return to U.S. District Court on Dec. 3, when she faces a sentence of up to 20 years in prison.
Assistant U.S. Attorney Nelson Cohen said that Buchanan is responsible for up to $400,000 of more than $2 million stolen from thousands of customers in Western Pennsylvania, Washington, Texas and Arizona between February 2007 and February 2011.
Postal Inspectors contend the scam was the brainchild of Samuel Cole of Larimer, who is the father of Buchanan's child.
Cole began business as New Image Consultants Inc., then changed names and locations to remain a step ahead of law enforcement, also operating as Fresh Start Opportunities in Seattle, Dallas and Arkansas, prosecutors said.
Cohen said Cole, 44, recruited “crews” of workers who were sometimes housed in motels and given unspecified compensation to sell the magazines, ultimately swindling more than 21,000 customers. Buchanan started out selling the magazines and later kept track of the companies' paperwork as part of the scheme, Cohen said.
“She's not responsible for the entire scheme, and she's not the primary person in the scheme,” Cohen told Senior U.S. District Judge Maurice Cohill Jr.
Court records indicate Cole, who is awaiting trial, is continuing to contest the charges.
Buchanan has cooperated with investigators and told them she issued refunds to wary or unhappy customers, just to keep the scheme from unraveling.
But Cohen said investigators found only one instance in which a refund was paid — and none in which customers received magazines.
Workers were instructed to pose as single mothers who needed the money, ex-cons trying to get back on their feet, or to tell customers that the money or magazines were benefiting some other good cause.
“They generally indicated some sort of a heart-rending pitch,” Cohen told the judge, telling customers the magazines would be sent “to help the troops” or be delivered “in the name of a local children's hospital.”