United States v. Runner
| Decision Date | 09 March 2023 |
| Docket Number | 18-CR-0578(JS) |
| Parties | UNITED STATES OF AMERICA, v. PATRICE RUNNER, Defendant. |
| Court | U.S. District Court — Eastern District of New York |
For United States: John W. Burke, Esq. Charles B. Dunn, Esq. U.S Department of Justice P.O. Box Ann F. Entwistle, Esq. U.S Department of Justice Charles N. Rose, Esq. United States Attorney's
For Defendant: James Darrow, Esq. Abra Metz-Dworkin, Esq. Federal Defenders of New York One Pierrepont Plaza, Evan Sugar, Esq. Federal Defenders of New York
Patrice Runner (the “Defendant”) is charged with operating a nearly twenty-year long fraudulent psychic mail order scheme that obtained more than $180 million from approximately one million victims. (Indictment, ECF No. 1.) The alleged scheme involved sending letters, purportedly written by world-renowned psychics, to victims in the United States and Canada to induce payments for personalized astrological services and supernatural objects. (Id. ¶ 1.) Presently before the Court is Defendant's motion to dismiss the Indictment. (Mot., ECF No. 37.) For the reasons that follow, Defendant's motion is DENIED.
According to the Indictment,[1] from January 1994 through November 2014 Defendant, together with others, engaged in a direct mail operation based in Montreal, Canada which sent fraudulent letters to consumers throughout the United States and Canada (the “Direct Mail Operation”).[2] (Id.) As early as 2000, a Canadian corporation doing business as Infogest Direct Marketing (“Infogest”), administered the Direct Mail Operation. (Id. ¶ 2.) Defendant managed the Direct Mail Operation and directed Infogest's employees to handle many of the scheme's daily activities, including working with third-party vendors to print and mail the letters, tracking responses and payments by victims, maintaining and updating mailing lists, and identifying new victims by renting and trading lists with other direct mailers. (Id.) Defendant and his co-conspirators used a series of different shell companies to hide their participation in the Direct Mail Operation. (Id. ¶ 3.) The shell entities included two Canadian-registered corporations which were doing business as National Parapsychology Center (“NPC”) and Zodiac Zone (“ZZ”), as well as two Hong Kong-registered entities, Destiny Research Group, Ltd. (“DRG”) and Destiny Research Center, Ltd. (“DRC”) (collectively, the “Shell Companies”). (Id.)
Underlying the mail scheme were letters written and edited by Defendant, together with others, that were sent to victims who were often elderly and vulnerable. (Id. ¶¶ 5-6.) The letters fraudulently represented that those victims would receive personalized letters from one of two world-renowned French psychics, whom are identified in the Indictment as “Psychic A” and “Psychic B.” (Id.) According to the letters, the psychics had visions or used their psychic powers to determine that the victims could achieve great wealth and happiness or avoid illness and bad fortune, with the psychic's assistance. (Id.) As such, the letters directed victims to make monetary payments to purchase various unique and supernatural objects, or personalized astrological services and studies. (Id. ¶ 8.) Many letters also asked victims to send personal items, including photographs, palm prints and locks of hair to be utilized by the psychics for other personalized rituals. (Id. ¶ 9.)
Contrary to these representations, the renowned French psychics were not involved in the sending of the letters nor did they receive responses from victims. (Id. ¶ 7.) Although the psychics' letters appeared personalized because they referred to recipients by name and appeared handwritten in certain places, in actuality, the letters were mass-produced by Defendant and his co-conspirators by renting and trading mailing lists with other direct mailers, including other fraudulent psychic letter mailers. (Id. ¶¶ 6-7.) Moreover, the purportedly unique and supernatural objects were mass-produced trinkets, and the psychics did not provide any personalized astrological services or studies. (Id. ¶ 8.)
When victims responded to letters by sending payments ranging from $5 to $50, or other personal effects, Defendant and his co-conspirators caused numerous additional follow-up or “backend” letters to be sent to those victims from one of the psychics. (Id. ¶¶ 8, 10.) These follow-up letters described more visions, services and supernatural objects that could be obtained for additional payments. (Id.) Victims who sent payments in response to one fraudulent letter received as many as 30 to 40 of these back-end letters in a single six-month mailing cycle; many victims received more than 100 letters throughout the course of the scheme. (Id.)
In total, Defendant and his co-conspirators caused millions of fraudulent letters, by United States mail, private commercial carrier and foreign mail, to be sent to victims throughout the United States and Canada. (Id. ¶ 11.) Defendant and others rented and maintained private mailboxes, which were opened by using the names of the Shell Companies, in multiple locations, including: Morristown, New Jersey; Forest Hills, New York; Everett, Massachusetts; Medford, Massachusetts; Sparks, Nevada; and Chicago, Illinois. (Id. ¶ 12.) The letters included pre-printed return envelopes addressed to the psychics, in the care of one of the Shell Companies, at the address of one of these private mailboxes across the United States. (Id. ¶ 13.) As such, correspondence from victims, as well as their monetary payments and personal effects to be utilized in psychic services, were sent to these same addresses. (Id.) When responses from victims were received, Defendant's co-conspirators directed such mail be sent to a “caging service,” which is a “company that receives and handles return mail, payments, and correspondence on behalf of a direct mailer.” (Id. ¶ 14.) From 1998 through November 2014, the Direct Mail Operation used a caging service located in Deer Park, New York. (Id.) After receiving victim responses, this caging service removed any payments from the envelopes and threw the other items in the trash, which included personal letters from the victims to the psychics, photographs, palm prints, and locks of hair. (Id. ¶ 15.)
The caging service forwarded victims' payments to a payment processing company in Canada, in the names of the Shell Companies. (Id. ¶¶ 16-17.) To accomplish this, the caging service utilized different methods: (1) by depositing cash into bank accounts controlled by the caging service then writing checks to the Shell Companies who then sent the checks to the payment processing company; (2) by sending checks and money orders by mail and private commercial carrier or by scanning and electronically transmitting them; and (3) by providing victims' credit card information to the payment processing company. (Id. ¶ 17.) Defendant and his co-conspirators used wire transfers to send the payment processing company instructions on how to disburse these proceeds to their various bank accounts across the world, and to pay the co-conspirators and vendors that provided services to the Direct Mail Operation. (Id. ¶ 18.) Over the course of the nearly 20-year scheme, the Direct Mail Operation received more than $180 million from more than one million victims in the United States. (Id. ¶ 19.)
Based on the foregoing allegations, Defendant is charged by an eighteen-count Indictment, dated October 25, 2018. Count One charges Defendant with conspiracy to commit mail fraud and wire fraud. (Id. ¶¶ 20-21.) Counts Two through Thirteen charge Defendant with mail fraud:
Count Approximate
Date
Description
Two
Payment from Victim B.S., sent by private interstate carrier to caging service in Deer Park, New York.
Letter purporting to be from Psychic A, sent by United States mail to Victim I.W. in Farmingdale, New York.
Payment from Victim J.D., sent by private interstate carrier to caging service in Deer Park, New York.
Payment from Victim W.G., sent by private interstate carrier to caging service in Deer Park, New York
Payment from Victim B.C., sent by private interstate carrier to aging service in Deer Park, New York.
Letter purporting to be from Psychic A, sent by United States mail to Victim B.D. in Farmingdale, New York.
April 2014.
Letter purporting to be from Psychic B, sent by United States mail to Victim B.D. in Arverne, New York
Payment from Victim K.A., sent by private interstate carrier to caging service in Deer Park, New York.
Payment from Victim M. Sm., sent by private interstate carrier to caging service in Deer Park, New York.
Payment from Victim M. So., sent by private interstate carrier to caging service in Deer Park, New York.
Payment from Victim S.W., sent by private interstate carrier to caging service in Deer Park, New York.
Letter purporting to be from Psychic A, sent by United States mail to Victim K.E. in Calverton, New York.
(See id. ¶¶ 22-23.) Counts Fourteen through Seventeen charge Defendant with wire fraud:
Count
Approximate Date
Description
Fourteen
Wire transfer of $49,089.20 from payment processing company in Canada to caging service in Deer Park, New York.
Wire transfer of $31,473.99 from payment processing company in Canada to caging service in Deer Park, New York.
Wire transfer of $41,027.86 from payment processing company in Canada to caging service in Deer Park New York.
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