Storefront in Kansas. One of many fronts in a magazine subscription scheme that preyed on elderly people for 20 years.

Fraud aimed at elderly largest in history

MINNEAPOLIS – The mastermind of a massive telemarketing scheme that bilked pensioners out of $335 million for phony magazine subscriptions is going to prison. Russell Rahm, 54, of Olathe, Kansas, was sentenced to 10 years. Rahm also was ordered to pay $110 million restitution to victims. The sentence was issued by Minnesota-based federal Judge John Tunheim despite a plea from Rahm’s attorney for home confinement because he’s paralyzed from a 2019 stroke. The judge said no, calling Rahm the most prominent of 60 co-conspirators in the scheme that ran 20-some years. The prison sentence rejected a statement from a former federal prisons official supporting home confinement, noting the possibility of Rahm being abused in prison because his post-stroke incapacitation.

Case profile

The prosecution of Rahm stemmed from a 2016 lawsuit by the Minnesota attorney general against a Fridley man who ran a Rahm subsidiary. The man was among 60 co-conspirators in what turned outto be the  largest fraud conspiracy against elderly people in U.S. history. Agents at call centers, mostly]in Florida, phoned victims and followed scripts about an existing magazine subscription that supposedly was set to auto-renew. As many as 10 of the phony companies charged as much as $1,000 a month to victims’ credit cards. About 183,000 victims were duped out of $335 million. All 60-some defendants, including Rahm, pleaded guilty.

Rahm profile

The chief federal prosecutor, Harry Jacobs, said Rahm made himself rich by perpetrating the fraud. Jacobs said that Rahm lived in a fancy house; drove expensive cars;  had a luxury vacation home on Lake of the Ozarks, where he raced powerboats; and  had “all the trappings of wealth, all of which was built on proceeds of this fraud scheme.”

Swindker leading the high life. Dockside between heats on the powerboat circuit.

Powerboat racing. Rahm’s Wake Effects on Lake of the Ozarks in his sybaritic glory before an incapacitating stroke and the federal indictment that unraveled his crooked magazine subscription network.