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Quad-City Times - Iowa

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Magazine company sued in Illinois
By Thomas Geyer/ QUAD-CITY TIMES
May 16 2002

Karleen Hillery, former president of a company implicated in a Wisconsin crash that killed seven young people selling magazine subscriptions, is being sued by the Illinois Attorney General’s office for allegedly defrauding 70 consumers nationwide through a magazine sales scam. Also named in the suit were Hillery’s current companies, Circulation I and Circulation II, both of Rock Island.

Hillery is accused of hiring college students to sell subscriptions to popular magazines for $25-40, but no magazines ever arrived and the people who were solicited could not obtain refunds.

“We have served the companies through the registered agent, attorney James H. Schultz of Rock Island,” said Assistant Attorney General Avonne Seals, who is with the consumer fraud bureau. “He is just the person to receive the process. He has no legal obligation to represent the company,” she added. But Hillery, 38, of Coal Valley, and formerly of DeWitt, Iowa, cannot be found, she said. “We suspect she’s in Arizona,” Seals said. “We’ve located a personal residence there and a vehicle, and there is a person there avoiding the serving of the lawsuit.”

Hillery’s business offices were located in the Star Cres Building at 1830 2nd Ave., Rock Island, she said. Other renters in the office building, managed by Ruhl and Ruhl Commercial Co., say the businesses moved out quickly about a month ago. “They left there in the middle of the night owing the landlord,” Seals said.

The lawsuit filed May 2 in Champaign County by the Illinois Attorney General’s Office alleges that beginning in March 2001 and continuing through February, Hillery’s companies solicited sales of magazine subscriptions to consumers nationwide by way of door-to-door sales and by having salespeople approach potential buyers in public areas such as shopping malls and college campuses. College students primarily were hired to sell subscriptions, Seals said. They would tell potential buyers that they were trying to pay for college or that the purchase would help the salesperson win a trip to a particular country or win other prizes. “Subscription buyers were told they would start receiving their magazines within three months,” she added. But no one ever got their subscriptions. Subscriptions usually sold for between $25-$40 for a 24-month duration. Among the magazines being sold by Hillery’s companies were Maxim, Family Circle, Rolling Stone, Woman’s Day and Oprah Magazine, according to the lawsuit. Seals said Hillery’s companies also were selling Mademoiselle magazine. “That one is out of print,” she added.

The lawsuit claims six Illinois residents and 64 other consumers in 14 states were cheated, she said. The lawsuit is demanding civil penalties of up to $50,000 per violation, refunds for all consumers and the cost of investigating and prosecuting the case. It also seeks a permanent injunction prohibiting Hillery from engaging in the sale of magazines anywhere in the United States.

Seals said she was not aware that Hillery previously owned Subscriptions Plus Inc., which processed magazine subscriptions for Y.E.S., or Youth Employment Services, which was owned by Hillery’s former husband, Choan Lane of Long Grove, Iowa. Seven Y.E.S. employees died in a 1999 van crash in Wisconsin while out selling subscriptions for Y.E.S. Among the dead was 16-year-old Marshall Roberts of DeWitt, Iowa. Five other people were seriously injured in the accident. Lane was sentenced to 3 1/2 years in prison in October 2000 on four criminal charges involving his workers. The driver of the van, Jeremy Holmes of Clinton, Iowa, is serving a seven-year prison sentence on charges of vehicular homicide. Authorities said Holmes was going 81 mph when he tried to switch seats with a passenger so that he would not be in the driver’s seat when stopped by police. Holmes did not have a valid Wisconsin driver’s license.

Thomas Geyer can be contacted at (563) 383-2328 or tgeyer@qctimes.com.


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