'Miss Cleo' corporations cut a deal

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ST. CHARLES, Mo., Oct. 3 (UPI) -- Two Florida-based corporations behind television psychic Miss Cleo saw the writing on the wall and agreed to pay a $50,000 fine for defrauding consumers out of millions in pay-per-call services.

Steven Feder and Peter Stotz pleaded no contest Wednesday to felony fraud in the psychic hotline operation. A St. Charles County judge allowed Feder, 52, to go free after about an hour in court but Stotz, Feder's cousin, was sentenced to two years probation.

The corporations they head, Access Resource Services and Psychic Reader Network, bilked Missouri residents out of $18.8 million in "900" phone call charges, said state Attorney General Jay Nixon, whose office spent more than a year investigating the TV psychic and her backers. Nixon filed two lawsuits in July 2001 and filed an eight-count felony indictment.

"The meter has run out for the Miss Cleo crew in scamming Missourians," Nixon said in a statement. "The people behind Miss Cleo turned out to be more con artist than clairvoyant, more fraud than fortune teller, and more swindler than psychic."

Feder and Stotz are under investigation for civil fraud by the Federal Trade Commission and face possible criminal charges in other states.

"Miss Cleo," a reputed Jamaican shaman, in reality was played in television commercials by Youree Dell Harris, a Los Angeles actress. The ads allegedly misrepresented an offer of free minutes of psychic readings to keep consumers holding on the line so they were billed $4.99 per minute. Consumers also were charged for calls made by minors and for calls not made from their phones.

Some were charged for additional minutes after hanging up and most never spoke to Miss Cleo personally. Harris, a paid employee of the corporations, was not indicted.

The St. Louis Post-Dispatch said Feder and Stotz subcontracted calls to as many as 1,000 psychic readers a day, depending on the volume of calls made to the popular hotline.

The corporations were charged with violating Missouri's No Call law by making telemarketing calls to people on a no-call list. They agreed to cease telemarketing "900" numbers in Missouri and not to sell the names or phone numbers of state residents.