Five Years for a Denver Man in the $300 Million Magazine Telemarketing Scheme (Plus Tax Evasion)

What happened?

On November 14, 2024, the U.S. Attorney's Office for the District of Minnesota, part of the Department of Justice (DOJ), announced that Henry Aragon, 54, of Golden, Colorado, was sentenced to 60 months in prison and 2 years of supervised release for his role in the $300 million nationwide magazine telemarketing fraud scheme and for tax evasion.

He was ordered to pay $19,051,667 in restitution to fraud victims and $1,490,011 in restitution to the Internal Revenue Service (IRS).

Aragon pleaded guilty on July 5, 2022, to conspiracy to commit mail and wire fraud and tax evasion. Judge John R. Tunheim sentenced him on November 7, 2024.

The scheme, again

According to court documents, for more than a decade Aragon helped run a piece of the scheme that defrauded over 150,000 consumers, many older or otherwise vulnerable. A network of dozens of fake magazine companies in the U.S. and Canada ran call centers with deceptive scripts.

The big one was the "renewal" script:

• Telemarketers falsely claimed to be calling from the victim's existing magazine company about an existing subscription.
• They often offered to cut the monthly cost.
• In reality, they had no relationship with the victim and were signing them up for brand-new, expensive subscriptions.

Some people went from one subscription to more than a dozen, each sold as a way to "reduce" their rate. Aragon and his companies collected over $19 million from victims.

And he didn't pay taxes on it. IRS Criminal Investigation (IRS-CI) worked the case along with the U.S. Postal Inspection Service (USPIS) and the Federal Bureau of Investigation (FBI), with help from the Treasury Inspector General for Tax Administration (TIGTA) and the Minnesota Attorney General's Office.

Here's the thing ...

More than a dozen subscriptions. For one person. Read that again.

Think about who that is. Probably someone living alone, getting a stack of magazines every week, paying bills they don't understand, too polite to hang up on the nice person calling about a "discount."

That's not a customer. That's a victim. And the companies kept calling them because they were easy.

If your best customers are the ones who can't say no, you don't have a business. You have a problem.

What to do this week

• Look at repeat buyers. Are they buying because they want it, or because they can't keep track?
• Never pretend to be the existing provider.
• Make cancellation easy. If people can't get out, regulators will ask why.
• Report your income. Tax evasion turns a bad case into a worse one.

Treat customers like family. It's the right call and the smart call.