US v. Weingold

• Decision Date: 04 March 1994
• Docket Number: Civ. A. No. 94-127 (WGB).
• Citation: 844 F. Supp. 1560
• Parties: UNITED STATES of America and United States Postal Service, Plaintiffs, v. Harold P. WEINGOLD, an individual, Helen Archer, Inc. a New York corporation, Future Forecasters Corp., a New Jersey corporation, Holy Trinity Society, Inc., a Delaware corporation, Winners' Network Inc., a New York corporation, Fight Back International, Inc., a New Jersey corporation, Paul Zax Enterprises, Inc., a New York corporation, and Consumer's Depot, Corp., a New York corporation, Defendants.
• Court: U.S. District Court — District of New Jersey

844 F. Supp. 1560

UNITED STATES of America and United States Postal Service, Plaintiffs, v. Harold P. WEINGOLD, an individual, Helen Archer, Inc. a New York corporation, Future Forecasters Corp., a New Jersey corporation, Holy Trinity Society, Inc., a Delaware corporation, Winners' Network Inc., a New York corporation, Fight Back International, Inc., a New Jersey corporation, Paul Zax Enterprises, Inc., a New York corporation, and Consumer's Depot, Corp., a New York corporation, Defendants.

Civ. A. No. 94-127 (WGB).

United States District Court, D. New Jersey.

March 4, 1994.

U.S. Attorney's Office by Robert M Hanna, Asst. U.S. Atty., Newark, NJ, for plaintiffs, United States of America.

Robert DeMura, Newark, NJ, for U.S. Postal Service.

Levine & Dembia by Michael L. Levine, Cranford, NJ, for defendants.

OPINION

BASSLER, District Judge:

I. INTRODUCTION

The United States of America and the United States Postal Service have applied to this Court for a preliminary injunction under 39 U.S.C. § 3007, 18 U.S.C. § 1345 and Fed. R.Civ.P. 65. The Court has received papers submitted in support of the application by Robert M. Hanna, A.U.S.A., and papers submitted in opposition by Michael L. Levine, Esq., counsel for the defendants, Harold P. Weingold, Helen Archer, Inc., Future Fore-casters Corp., Holy Trinity Society, Inc., Winners' Network, Inc., Fight Back International, Inc., Paul Zax Enterprises and Consumer's Depot Corporation.

The Court has both subject matter jurisdiction over this matter under 18 U.S.C. § 981 and 28 U.S.C. §§ 1331, 1339, 1345 and 1355 and personal jurisdiction over the parties involved. The District of New Jersey is the proper venue pursuant to 18 U.S.C. § 981(h), 28 U.S.C. § 1391(b) and 39 U.S.C. § 3007(a).

The applicants have complied with Local Rule 12 A, by submitting a Verified Complaint as well as the Affidavit of United States Postal Inspector, George R. McCarthy, showing that the application qualifies for emergency consideration and should not be heard as an ordinary motion.

On January 24, 1994, the Court entered an Order to Show Cause with Temporary Restraints and an Order for Expedited Discovery, by consent of the parties. On January 31, 1994, the Court entered an Order modifying the Consent Order to Show Cause keeping the restraints in full force and scheduling a preliminary injunction hearing for February 15, 1994.

On February 16, 1994, the Government concluded its case, after having introduced the following witnesses: (1) Neil Schorr; (2) Postal Inspector, George McCarthy; (3) Barrington Illinois Police Chief, Edgar W. Fair; (4) Dr. Paul Shaman; (5) Neil Cofino; (6) Dr. William George Roll; (7) Sister Mary T. Salermo; (8) Darren Burton; (9) Salvatore Bascellaro; (10) James Monagle; and (11) Joseph Sinopoli. On February 25, 1994, the defendants concluded their case, having called the following witnesses to testify on their behalf: (1) Dr. Edward D. Weinberger; (2) John R. Dalnes; (3) Helen Archer; (4) Mary Ray; (5) Defendant, Harold P. Weingold; and (6) Norman Tim. The Court entertained closing arguments from counsel on February 28, 1994.

II. FINDINGS OF FACT AND CONCLUSIONS OF LAW

Pursuant to Fed.R.Civ.P. 52(a), the Court makes the following findings of fact and conclusions of law:

A. Findings of Fact

1. Defendant, Harold P. Weingold and the seven corporate defendants, are engaged in the business of direct mail marketing. (February 18, 1994 Stipulation of Facts ("Stip. of Facts"), ¶ 1). Using mailing lists, Weingold, who holds a Ph.D. in psychology, operating through his mail order company, Tower Mail Company, targets consumers by sending through the mail what is called a "solicitation." If customers respond to any of Weingold's solicitations by sending the requested fee, the consumer receives what is called in the trade, a "fulfillment." (Stip. of Facts, ¶ 3).

2. This action was brought by the United States Postal Service under 39 U.S.C. § 3007 and by the United States Government under 18 U.S.C. § 1345, against Weingold, individually and his seven corporations, alleging that the defendants created and implemented 11 separate mail fraud schemes.

3. The Government's investigation was prompted by numerous complaints and inquiries from consumers who received and responded to promotions and solicitations from the defendants' various businesses.

4. The State of New Jersey, Department of Consumer Affairs has also received numerous complaints and inquiries concerning defendants' solicitations and also initiated an investigation to determine whether defendants violated various state statutes. According to Barbara Ferris, an investigator with the New Jersey Division of Consumer Affairs, their investigation of Dr. Weingold began in 1990.

5. Defendant, Harold P. Weingold, is the principal in and controls the acts and practices of the seven named corporate defendants, Helen Archer, Inc., Future Forecasters Corp., Holy Trinity Society, Inc., Winners' Network, Inc., Fight Back International, Inc., Paul Zax Enterprises and Consumer's Depot Corporation. The corporate defendants have no employees. Weingold reviewed and approved each of the solicitations prior to the first mailing to potential customers. (Stip. of Facts, ¶ 8).

6. Defendants bring their service and product promotions to the public by means of direct mail solicitations. These promotions include: (a) psychic readings, good luck and mystical pendants, using the trade styles "Helen Archer," "Uri Giller," "Future Forecasters," and "Holy Trinity Society"; (b) lottery devices and sweepstakes, using the trade styles "Winners' Network," "Pot'O Gold" and "Paul Zax, Jr."; and (c) awards and solicitations in the guise of delivery notices using the business trade styles "Consumer's Depot" and "Fifth Avenue Creations." (McCarthy Aff., ¶ 3).

7. Defendants have used the following addresses to receive mail responding to their promotions: (a) 434 Ridgedale Avenue, Dept. 11-188, East Hanover, NJ 07936; (b) 117 W. Mt. Pleasant Avenue, Suites 127 and 132, Livingston, NJ 07039; and (c) 627 Eagle Rock Avenue, Suites 102 and 105, West Orange, NJ 07052. These addresses belong to three separate mail-receiving agencies. (McCarthy Aff., ¶ 4).

The Helen Archer Promotion

8. Defendant, Helen Archer, Inc., is a corporation organized and doing business under the laws of the State of New York. Defendant Weingold is the principal of Helen Archer, Inc. and uses the business trade name of Helen Archer to solicit money and/or property through the mails. (McCarthy Aff., ¶ 6).

9. Helen Archer is a reputed psychic living in Florida. As the principal of Archer Astrology Inc. she entered into a management agreement with Helen Archer, Inc. ("HAI"). (Gov.Ex. 12). Under this agreement Archer Astrology Inc. ("AAI") retained the services of Helen Archer, Inc., "as the exclusive marketing and financial consultant to AAI, for all products marketed by HAI." The agreement was signed by the defendant Weingold as Paul Zax, Jr 10. Defendants' "Helen Archer" psychic reading solicitations offer a guarantee that the recipient will receive large sums of money by purchasing Defendants' promotional materials. The solicitations represent that the consumers' names came to the defendants through means other than a commercial mailing list. The pre-printed mail solicitations represent that a psychic, Helen Archer, had a vision of the recipient and guarantees that responding consumers will be given "lucky" numbers that will allow them to win their state lottery. The promotion solicits $20.00 from the recipient for a so-called "private phone number" to enable the recipient to make a "free call," in order to receive the "lucky numbers." (See Gov.Exs. 1, 1A and 1B).

11. Excerpts from the "Helen Archer" promotion solicitation state as follows¹:

Last night I had a vision about you. It was very powerful. Very vivid. I know for a fact you had won a very large cash prize (something like $211,721.06 or even more) and you were collecting your money from the Pennsylvania State Lottery Director, Mr. Charles Kline! This will happen sometime before Friday August 13, probably in the next several weeks! Every time I've had these visions before, it has always meant a BIG CASH PAYOFF for the person involved.

It is very important that I speak with you right away name of recipient. I will give you my private phone number. This is so important that I've made special arrangements with the phone company so you won't even have to pay any long distance charges. (I tried calling you this morning but I couldn't reach you.) This is a FREE call.

The solicitation, which is made to appear as a personalized letter, is replete with capitalized and underlined exclamations and unsubstantiated assertions such as "Normally my clients seek me out. But in your case, I was contacted by someone close to you ... I received a postcard from someone ... it was not signed, but the writer asked me to personally contact you." (Id.)

12. Although the solicitation by Helen Archer speaks of a personal vision ("I had a vision about you. It was very powerful. Very vivid." (Gov.Ex. 1)), Archer acknowledged at the preliminary injunction hearing that the "vision" was about a sum of money "$211,721.06" and that there was no specific vision of the person she was writing to. Instead Archer later would receive "an impulse" or "feeling" when running her fingers over a computer generated commercial mailing list that the addressee was the recipient of the generalized vision of the money.

13. Defendant's witness Mary Ray testified that she understood the language to mean that Archer actually had a vision of herself "standing next to the lottery."

14. The Postal Inspection Service has received numerous complaints and inquiries regarding the Helen Archer Promotion, including letters of complaint from Elizabeth Pitt and Bart Boyer, urging the Postal Service to prevent the defendants from using the mails for their Helen Archer Pro...