Former McDonald's CEO calls McMillions scam 'embarrassing'

In the 1990s, McDonald’s lost $24 million in a scandal centering on its popular Monopoly game. HBO just released a documentary series called “McMillion$” which follows the investigative trail of the hoax.

“It was a tragedy because McDonald’s franchisees, McDonald’s employees [and] McDonald’s customers were victims of a fraud. That was just awful,” former McDonald’s CEO Ed Rensi told FOX Business’ Stuart Varney on Wednesday.

Starting in 1985, the fast-food company operated a promotional game where customers could collect spaces on a McDonald’s Monopoly board by peeling the spaces off of McDonald’s products. Participants would then mail the pieces in to collect their prize. The exact profit made from this promotional effort is unknown, but anyone who remembers the craze can vouch for its popularity.

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Rensi was president and CEO of the fast-food giant from 1991 to 1997 which coincided with the scandal. The fraud was largely the result of one man being in charge of security for the winning game pieces, according to Rensi. The man, ex-cop Jerry Jacobson, used security tags he received outside of the normal audit process to alter the game pieces, Rensi continued.

The crime went unnoticed, according to Rensi, until Doug Matthews, an FBI agent in Jacksonville, Florida, noticed a cluster of winners in the area.

“They actually had a bit of a sting operation where the FBI took one of our senior marketing people, and they went out and interviewed the winners,” Rensi admitted during "Varney & Co."

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The FBI feigned a news story about the Monopoly game-winners in order to get them all in the same room to determine exactly what was going on, Rensi added. All of the winners turned out to be relatives of the man in charge of security, according to Rensi.

Rensi said McDonald’s even continued the game longer than it otherwise would have in order to “round up all the crooks.”

He noted nobody really won the big prizes on offer. On one occasion, Rensi received a letter from a woman who had won a $50,000 prize but asked McDonald’s to donate the money to St. Jude’s because she did not need it.

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More than 50 people were convicted of mail fraud and conspiracy. In 2001, Jacobson was sentenced to serve three years in prison and was forced to pay back $12.5 million in damages.

“The good news,” Rensi said of the scandal, “is [customers] still got hamburgers and French fries.”

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