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Olathe man pleads guilty for role in leading $300M conspiracy involving fraudulent magazine subscriptions

Bank whistleblower uncovers $150B in fraud
Posted at 6:10 PM, Dec 08, 2022
and last updated 2022-12-08 19:10:04-05

KANSAS CITY, Mo. — An Olathe man pleaded guilty Thursday in a federal case out of Minnesota for his role in leading a $300 million fraud scheme that targeted elderly victims.

An Oct. 2020 federal indictment identified Russell Rahm (also known as Rusty Rahm) as the leader of a 20 years-long conspiracy to “defraud victim-consumers across the United States,” many of which were identified as elderly and vulnerable.

Rahm, 52, pleaded guilty to his role in the conspiracy, admitting to charges of conspiracy to commit mail fraud.

Federal prosecutors believe the Rahm-led conspiracy defrauded as many as 150,000 elderly and vulnerable victims out of $300 million.

Rahm and as many as 60 other defendants were accused of calling consumers who had existing magazine subscriptions, offering them the option to “renew,” often at a lower cost.

But Rahm and his team weren’t calling to renew. Federal investigators said the conspirators tricked victims into signing up for entirely new subscriptions that they never wanted or might have been able to pay for.

The conspiracy involved several magazine companies, in which the companies would share lists of victims, allowing members of the conspiracy to target victims multiple times.

Another arm of the conspiracy included a collections company that provided collections services for victims who did not pay or challenged the fraudulent charges.

A sentencing date has not yet been set.

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