Dennis Simpson, one of dozens of individuals and companies accused of wrongdoing in a subscription fraud scheme, claims his co-defendant, Jeffrey Hoyal, is turning him into a scapegoat in a plan to renew marked-up subscriptions with deceptive mailers.
The Oregon Attorney General’s Office alleged in 2015 that Hoyal, Simpson and the others were involved in a scheme to sell newspaper subscriptions at marked-up prices, even though they had no connections with the newspapers.
In 2015 the participants and companies named in the scheme agreed to pay $3 million to the state and up to $500,000 in restitution to Oregon victims.
In a federal suit filed in 2016, the Federal Trade Commission alleged that more than 375 newspapers had sent cease-and-desist letters to the companies involved in the suit, and claimed the Oregon companies used strategies to avoid detection by the publications, such as through the creation of new “shell corporations.”
The FTC says Simpson developed the “form and substance” of the mailers, though Simpson denies it. The FTC says Hoyal, a Jacksonville-area resident, received the bulk of the profits, with at least $15 million paid to his company Hoyal & Associates.
Hoyal has claimed he was merely a consultant to the companies, but recent filings by Simpson, he claims Hoyal controlled “both the operations and money at issue.” He says Hoyal did so by paying co-defendants named in the FTC suit to be owners and officers.
“Although (Hoyal) claims to have been a consultant for these people and their companies, in reality he hired all of them, determined their pay, paid them, oversaw their daily operations and advised them on what to do,” Simpson states.
Simpson’s filing largely seeks to compel Hoyal and his wife, Lori Hoyal, to answer questions related to their subscription businesses in the FTC civil case, because the Hoyals pleaded the Fifth Amendment, declining to answer questions.
Questions Hoyal refused to answer during an Oct. 31, 2017, deposition included which of his companies owned databases used in the subscription business and how tax returns were filed for Mail Industries, Inc.
During the deposition, Lori Hoyal pleaded the Fifth when asked to confirm or deny an email submitted by a former Hoyal accountant stating that income from Mail Industries went directly to Lori Hoyal’s personal account.
“Both Jeffrey and Lori Hoyal refused to answer material questions by invoking an improper Fifth Amendment privilege,” Simpson’s filing states.
Court documents filed by Hoyal have previously stated that Simpson has a vendetta against Hoyal since their professional relationship ended in 2015.
Since 2016, Simpson has filed multiple lawsuits against Hoyal and Hoyal’s companies in Jackson County Civil Court over a string of business dealings, including claims that Hoyal cheated him out of subscription profits and failed his fiduciary duty as trustee in a Northern California housing development in the late 2000s.
Reach reporter Nick Morgan at email@example.com. Follow him on Twitter @MTCrimeBeat.