Subscription for disaster
- Todd Murphy
- Portland Tribune - News
PART II: Trio's easy to track in shady industry, but cash trail isn't
Second of two parts.
The magazine sales agents who go door-to-door selling often-bogus subscriptions - including the crew of agents who were in Portland last week - are at the bottom of the tawdry industry's food chain.
They barely make enough money, maybe $20 dollars a day, to eat.
At the top of the food chain - where the real money is made, according to industry watchers - are people like Robert Spruiell. And Karleen Hillery. And Jonathan Tork.
The three manage, own or are otherwise closely linked to the sales crew that was in Portland last week, a crew that works for a company operating under the name of Integrity Program.
And in an industry known for checkered histories, few people have histories more checkered than two of the three - Hillery and Tork.
Tork is the manager, and, according to Spruiell, the owner, of Integrity Program. Tork was in Portland with the Integrity Program crew last week. (A Portland Tribune reporter went to the Gresham hotel where the crew was staying last week and asked to speak to Tork, then left a message when a company official said he wasn't there. The Tribune later left phone messages for Tork. He never responded.)
Tork has been in the magazine sales business since at least the 1980s, operating and owning various companies. In 1992, he was assessed a $50,000 penalty by the Federal Trade Commission for handing out fraudulent receipts to customers that effectively prevented them from canceling magazine orders.
And in 1993, he was sentenced to a Texas prison on a felony theft charge.
Hillery is more recently infamous in the industry, however - in large part because of a horrific 1999 Wisconsin van accident that killed seven magazines sales agents working for a company to which she was linked.
Hillery - at various times also known as Karleen Hillery-Spruiell, Kay Hillery, Kay Hillery Spruiell and several other aliases - is the former wife of Spruiell, the current owner of Integrity Sales. She apparently still manages a sales crew for Integrity Sales, the company that appears to be either a sister company or parent company of Integrity Program.
Wisconsin issues its ban
Five years ago, Hillery settled a multimillion-dollar lawsuit filed by the Wisconsin attorney general related to her company's involvement in the Wisconsin accident.
The accident happened when a driver with a suspended license working for a magazine sales company called Youth Employment Services tried to switch places with a van passenger while traveling 80 mph on an interstate highway. The driver tried to make the switch after seeing a patrol officer but lost control of the vehicle, which rolled several times. Twelve sales agents were thrown from the vehicle.
According to the Wisconsin attorney general's lawsuit complaint, Hillery owned 20 percent of Youth Employment Services and another ex-husband, Choan Lane, owned the rest and managed the company.
Hillery also wholly owned a company called Subscriptions Plus, which processed Youth Employment Services' magazine orders by sending them on to magazine publishers. As part of the Wisconsin settlement, Hillery agreed to personally pay $25,000 in forfeitures and fees and was banned from doing business in Wisconsin.
'She's the woman responsible for my daughter's death,' Phil Ellenbecker, whose 18-year-old daughter was killed in the Wisconsin accident, said of Hillery.
A receptionist for Integrity Sales said Hillery worked for the company, and messages were left for her there. She did not return the calls.
The driver of the van, Jeremy Holmes, pleaded guilty to vehicular homicide and was given a seven-year prison sentence. Lane pleaded guilty to several charges related to the accident and was sentenced to three-and-a-half years in prison and jail.
Hillery was not criminally charged.
Midwest lawsuit looms
More recently, a pending Illinois lawsuit against Hillery and one of her companies could result in her being fined $3.5 million and being banned from selling magazine subscriptions anywhere in the United States.
A consumer fraud lawsuit filed by the Illinois attorney general in 2002 charges Hillery and two companies she owned with defrauding six Illinois consumers and 64 other consumers in 14 states by selling them subscriptions to magazines that never came.
The lawsuit is demanding civil penalties of up to $50,000 per violation, and is asking for a permanent injunction prohibiting Hillery from selling magazines anywhere in the U.S.
Meanwhile, an Arizona court has a pending warrant for Hillery's arrest for something not related to magazines - for her failure to pay fines related to a drunken driving conviction, in January of last year.
The conviction was at least her fourth drunken driving conviction. In November 2000, an Iowa court sentenced her to five years in prison after her third drunken driving conviction. She served less than a year of the sentence, in a halfway house, before she was paroled and moved to Illinois.
Cash trail's hard to follow
The arrests, convictions and civil penalties connected to Hillery and Tork are easy to find. What's harder to find is their money - the significant money that industry watchers believe the Hillery, Tork and Spruiell have made from the business.
Brittany Pierce, who just left Integrity Program while her crew was in Portland and who described the difficult five years she spent working for the company, said Spruiell 'has a lot of cars.' Pierce said she thinks her crew was working for Spruiell's company, and she said he would visit her crew periodically.
'He's had a couple of different (Cadillac) Escalades,' Pierce said of Spruiell. 'Some really, really old restored (Ford) Mustangs. All really expensive cars. … Every time I see him he has a different vehicle.'
Real estate's attractive, too
Arizona real estate records show that Spruiell has in recent years purchased two fairly modest Arizona residential properties. He also, in partnership with an entity called the 'Martha Ann Rice Revocable Living Trust,' bought a $200,000 piece of land in Maui, Hawaii, in April 2005.
Hillery also appears to like unusual cars. When she was arrested on her third drunken driving charge in October 1999, she was stopped driving a recent-model Chevrolet Corvette Indy Pace Car.
But she apparently doesn't like paying taxes.
In 2002, the federal government placed a $213,000 lien on a home she owned in Coal Valley, Ill., then worth about $370,000, for unpaid federal taxes.
The next year, she and Spruiell moved to Arizona.
This is the second part of a two-part story by the Tribune's Todd Murphy on Integrity Program and the door-to-door magazine sales industry. To read the first part and its related stories, click the links below.
Subscription for disaster, Part I:
Daughter's death sets off father's crusade:
Industry complaints aren't new: