Minneapolis, MN – Henry Aragon, 54, of Golden, Colorado, was sentenced today to 60 months in federal prison, followed by two years of supervised release, for orchestrating a $300 million telemarketing fraud scheme and committing tax evasion, the U.S. Attorney’s Office for the District of Minnesota announced.
In addition to his prison sentence, Aragon was ordered to pay $19,051,667 in restitution to the victims of his fraudulent telemarketing operations and $1,490,011 to the IRS for his role in tax evasion. The restitution payments are part of a broader effort to compensate the over 150,000 victims who were deceived by Aragon and his co-conspirators.
For more than a decade, Aragon ran a nationwide telemarketing fraud scheme that involved magazine subscription sales. The scheme targeted vulnerable consumers, many of whom were elderly, and convinced them to make large or repeated payments for magazine subscriptions that they did not need or authorize. The fraud involved a network of fraudulent telemarketing companies operating across the United States and Canada.
Aragon and his co-defendants used deceptive sales tactics, including false renewal offers where they falsely claimed to represent a customer’s current magazine subscription company. The callers pressured victims into paying for new subscriptions under the guise of reducing their existing subscription costs, even though the companies had no affiliation with the magazines in question. In many cases, consumers were enrolled in multiple, unrelated subscriptions, sometimes receiving over a dozen magazine subscriptions.
The fraudulent companies ran call centers where employees used misleading scripts to manipulate consumers into providing payment information for magazine subscriptions they never requested. Over the course of the scheme, Aragon and his network of companies defrauded thousands of victims, collecting more than $19 million in ill-gotten gains.
In addition to his involvement in the fraudulent scheme, Aragon evaded taxes on the income he earned from the fraud. According to Tom Demeo, acting special agent in charge of IRS Criminal Investigation in Denver, Aragon’s actions unfairly shifted the tax burden onto law-abiding taxpayers. “By evading his tax liability, Aragon unfairly shifted the tax burden to honest American taxpayers to fund vital services such as education and infrastructure,” said Demeo.
The IRS Criminal Investigation division identified over $2 billion in tax fraud in the last fiscal year and is committed to holding tax cheats accountable.
Aragon’s co-conspirators have also been charged and convicted, with many already serving sentences for their roles in the scheme. The case highlights the ongoing issue of fraudulent telemarketing operations targeting vulnerable consumers and underscores the importance of vigilance in consumer protection efforts.
Aragon is scheduled to begin serving his sentence immediately, with restitution payments set to begin as part of his sentencing terms.
