Man Confesses Guilt in Plot to Rig Contests by Alpha Beta, Taco Bell

A Navy aircraft mechanic admitted Monday that he helped rig sweepstakes sponsored by Alpha Beta and Taco Bell as part of a scheme that diverted at least $68,000 from consumers to people associated with the New Jersey firm running the contests.

James Frederick Lee, 50, of San Diego entered a guilty plea to a single count of mail fraud in the case and has agreed to testify against executives of C & K Marketing of New Jersey.

Lee, a civilian employee of the Navy, made $25,500 by accepting prizes in Taco Bell’s “Wheels, Reels, and Meals” and Alpha Beta’s “California Dreamin’ ” contests.

Lee said he was handed winning tickets for the games by a relative of a C & K executive whom he had met while taking scuba-diving classes. Lee also admitted that he falsely claimed to have won a $28,500 contest first prize, which was in fact diverted to C & K coffers, as part of an attempt to hide the swindle from the chains, according to federal prosecutors.

“I was asked by C & K to do them a favor, to tell somebody when they called on the phone that I was a winner in the Taco Bell promotion,” Lee told U.S. District Judge Dickran Tevrizian.

Alpha Beta and Taco Bell hired C & K to run the sweepstakes promotions, and neither had any knowledge of the contest rigging, according to the prosecutor, Assistant U.S. Atty. David Katz.

C & K, of Englewood Cliffs, N.J., also has organized major promotional sweepstakes for such companies as McDonald’s, Wendy’s, Burger King, Procter & Gamble, A & P and Pepsico. Katz said an investigation into C & K operations is continuing.

“This is a key step,” Katz said of Lee’s admission. “Now you have an insider in both promotions admitting his role, really acknowledging his guilt.”

Also indicted by a federal grand jury last month in the case are John Edward Curtin III, C & K president; Kevin Joseph Kissane, vice president; Jerome Baratta, a car dealer, all of New Jersey, and Kim Curtin of South Laguna, a cousin of the C & K president. Lee and Kim Curtin had become friends while attending scuba classes.

Prosecutors allege that Kim Curtin gave Lee a winning ticket for a new, $12,000 Ford Mustang in the Taco Bell promotion. In 1986, he was paid $1,500 to state falsely that he was a winner of a $28,500 first prize ticket. Investigators believe the remainder of the prize money was retained by C & K.

Couldn’t Contact Winner

Katz said suspicion first arose when a Taco Bell district manager in Indiana tried to contact a local winner but could not locate him. Eventually, Taco Bell demanded an audit.

The audit, which was allegedly prepared by an accounting firm headed by a relative of another C & K official, revealed no irregularities. Taco Bell decided to make one last check and called Lee’s home. His wife was not aware of her husband’s winnings, and when restaurant officials interviewed Lee, he admitted everything.

Shortly before investigators interviewed Lee, Kissane had given him $25,000 in cash and told him to tell investigators he had won “fair and square,” prosecutors said. Lee spent $12,000 of that and returned the rest to Taco Bell.

Lee faces a maximum of five years in prison and a $250,000 fine at sentencing, set for Jan. 23.