News

McDonald's settles in Monopoly suit

May 16, 2002

WAKEFIELD, Mass. -- McDonald's, which has been named in a fraud lawsuit involving kiosks companies Web Booth and Waterstones (See story: Web Booth, McDonald's named in lawsuit involving kiosks), has reached a nationwide settlement agreement stemming from suits filed by consumers related to its Monopoly game promotion.

The suits were filed last year after a security official with Simon Marketing Inc., the company that operated McDonald's games and promotions, was arrested and charged with embezzling more than $20 million worth of winning Monopoly game pieces.

According to Simon's first quarter report to the Securities and Exchange Commission, the settlement was reached around April 19 and is subject to court approval and agreements to dismiss all class-action suits related to the case. The proposed settlement also releases Simon from all consumer claims. A settlement figure was not disclosed in the report.

A group of 179 investors, 160 of them based in North Carolina, filed a fraud and intentional misrepresentation suit against McDonald's, Web Booth, and other parties on May 1 in Los Angeles Superior Court. The suit contends that Web Booth and Waterstones defrauded investors out of $8.1 million.

The plaintiffs paid between $14,250 and $24,950 to invest in Internet access kiosks that Web Booth planned to place in McDonald's restaurants nationally. But only about 40 were placed in McDonald's locations in the Sacramento, Calif., area.

The suit names McDonald's for allowing its image and logo to be used in Web Booth promotional material, giving Web Booth's campaign credibility. The Simon-Monopoly case is also cited in the suit to show a lack of institutional control at McDonald's.

"At no time did McDonald's terminate its relationship with Web Booth and (Web Booth official) John Perry until after Perry disappeared, leaving empty bank accounts in mid-December 2001," the suit states, "despite the fact that McDonald's had learned in about July 2001 that another of its business partners, Simon Marketing, Inc., had systematically defrauded McDonald's customers in "Monopoly" and "Millionaire" promotional games."