Did ‘psychic’ Maria Duval make a deal with the devil?

Burgeoning fraud against consumers is affecting millions. Two young investigative journalists at CNN recently reported an immense global mail fraud scheme targeting senior citizens.

The letter, postmarked March 27, 2014, begins, “You may have already received the special package I put together for you which contains ‘Your Special Compendium of Divine Formulas’ and your genuine Cross of Invocation of the 7 Powers. Due to the confidential nature of its contents, I felt it necessary to send it to you in a separate package. …

“Surprisingly, your case requires more pages than I had anticipated. There are many things I have discovered about you and you are going to learn about them in a few moments.

“I have also noted the answer to the question which is bothering you most at this time, the problem being: Will this nation improve?

“Here, soon you are going to learn my answer on this matter. I am also going to give you your personal lucky numbers for the lottery and for other games of chance.

“I still have many other facts and events to reveal to you about yourself and about your future.”

So begins a 16-page letter, signed “Maria Duval,” sent to a hopeful recipient wanting to ascertain their future. Maria requests personal information, a photo or strands of hair so she can prepare “your detailed personal astral-clairvoyant forecast” and includes a “Special Confidential Invitation” to the recipient to send $45.

Promising solutions in exchange for cash

Ninety percent of the mail you receive probably is junk: offers for new credit cards, catalogs, advertising fliers and letters from lawyers wanting to add you to class-action lawsuits. Marketing firms procure our names and addresses and then target us with mostly harmless offers. However, some of the solicitations target vulnerable groups, especially senior citizens, to try to defraud them.

Blake Ellis and Melanie Hicken, CNN investigative journalists, in their new book A Deal with the Devil – The Dark and Twisted True Story of One of the Biggest Cons in History, detail their investigations into a supposed French psychic named Maria Duval.

As they reported on CNN (The Scam, The Psychic and the ‘Sin’ of Wanting More, “CNN Investigates,” July 26, 2018) and in their book, Ellis and Hicken describe how someone was sending millions of letters in Maria Duval’s name to senior citizens in Canada, the U.S. and abroad that promised them solutions to their financial problems by giving them winning lottery numbers or ways to access windfalls, only if they were willing to trust her. Of course, she was always asking for money — about $40 per letter. Victims, who often lived on fixed incomes, would willingly send the fraudsters thousands of dollars until family members would stop the correspondence.

As Ellis and Hicken conducted their research, they said they found hundreds of complaints posted online by victims and families about how Duval defrauded them with her letters. According to their book, the fraud was so predominant that the U.S. Postal Inspection Service (USPIS) had already opened multiple investigations into this scheme in 2007 — not long after the frauds emerged.

How does a CFE tackle a perplexing, multifaceted consumer fraud like this? We know that when we plan a possible fraud examination, we can’t commence without proper predication. According to the Fraud Examination Methodology section of the ACFE’s online Fraud Examiners Manual, predication is “the totality of circumstances that would lead a reasonable, professionally trained, and prudent individual to believe that a fraud has occurred, is occurring, or will occur.” We must also gain an understanding of who the potential fraudster(s) could be. Was Maria Duval a real person or a fictional character created by fraudsters?

After Ellis and Hicken completed their initial research into the case, they still had many questions. So, they met with Postal Inspector Thomas Ninan at the USPIS, who was assigned to a special unit investigating mail fraud. Up to that point, they had no idea that they’d stumbled across the largest-ever mail fraud scam. Ninan told them that the U.S. government estimated that a Canadian-based direct mailing company was behind at least 56 million letters from Maria Duval (and “Patrick Guerin,” a lesser-known psychic) from 2006 to 2014 alone. However, the scam possibly had started in the ’90s and had raked in more than $200 million in the U.S. and Canada alone.

Interestingly, the number of victims that the U.S. government attributed to the Maria Duval letter scam was more than 60 times greater than Bernie Madoff victims. Though Madoff’s victims were much wealthier than the Duval victims, many lost their entire savings.

Shell companies and middlemen

The U.S. government uncovered in the Duval case an amazingly intricate web of people and companies spanning the globe, according to Ellis and Hicken’s book. At the center of it was a company called Destiny Research Center, which was registered in Hong Kong to a Swiss national but had opened up mailboxes at a UPS store in the small town of Sparks, Nevada. Many of the victims who posted the online complaints said they were sending money to an address in Nevada that corresponded to one of the UPS mailboxes.

So, Ellis and Hicken traveled to Sparks in their quest to find those behind the letters. All they discovered were unfriendly UPS store employees (who were tired of receiving inquiries about the Duval letters, according to Ellis and Hicken’s book) and closed mailboxes for Duval victims’ responses. However, they learned that these commercial mailbox locations had been instructed to bundle the mail and resend it to a different company, Data Marketing Group Ltd., in Long Island, New York, which helped mail-order businesses manage client databases and receive mail, track payments and fulfill orders.

According to Ellis and Hicken’s book, they discovered from the government’s most recent lawsuit that Data Marketing Group would process up to $500,000 in payments from victims every two weeks. Although many of the victims sent personal letters, which Duval assured she’d read, investigators found that the company threw away everything except for the money. According to Ellis and Hicken, the USPIS found dozens of boxes of evidence during dumpster dives at Data Marketing Group’s offices.

USPIS investigators found that the company would process a payment and input transaction details into a database, which would trigger the next in a string of letters from Duval to victims. These transaction details provided the U.S. government with proof that Destiny Research Center had used Duval’s and victims’ letters to commit mail fraud. “Destiny Research Center states clearly that the solicitation is derived from (Duval’s’ or Guerin’s’) individual psychic vision about the consumer,” said USPIS Inspector Ninan, as quoted in Ellis and Hicken’s book. “When in fact, Destiny Research Center is merely sending to consumers mass mailings of substantively identical solicitations containing identical visions.”

Tracking down Duval

I can remember when my son was about 8 years old, he started bringing home books from the series “Where’s Wally?” (That’s what it’s called in the U.K. where we lived at the time. You might know them as “Where’s Waldo?”)

These picture books challenge the reader to find Wally (or Waldo) among entire pages of look-a-likes and imposters. Similarly, Ellis and Hicken scoured the internet for Duval sightings or anyone remotely associated to her or the letter scam. They finally determined Duval was a real person and were able to meet her behind the gates of her Southern France home in 2016. However, Duval was unable to answer the simplest questions because of dementia’s toll. Ellis and Hicken had to rely on Duval’s son, Antoine Palfroy, and granddaughter to fill in the blanks.

In the spring of 2018, the French police and a U.S. investigator arrived at Duval’s home with a warrant to search the property and look for money gained from the fraud, Palfroy told Ellis and Hicken, but they didn’t find any hidden cash. “Everyone thinks she had millions but no, she didn’t,” Palfroy told Ellis and Hicken. “The companies had a lot of money, that’s true, but my mother didn’t even have 1 percent.”

Lessons learned

I asked Ellis and Hicken if they were able to understand Duval’s motivation to be part of the fraud consortium that used her name to take advantage of so many vulnerable elderly persons. I was thinking how the Fraud Triangle might apply to this case.

Although Ellis and Hicken believe that greed was the main motivator of the businesses who were behind the letters, they also believe Duval might have had additional motives. “We will never know exactly what convinced her to sign over the rights to her name,” Ellis says. “But we imagine there were both financial and emotional pressures — such as vanity — at play.”

I usually don’t consider vanity as a potential motivator, but cases like this make me think that perhaps I should. I asked Ellis and Hicken, “How can CFEs and investigative journalists work better together in the future to uncover the truth in similar cases?” Ellis says that “we all play very different roles in exposing fraud, but as journalists, we often use information dug up by private investigators, law enforcement agencies and attorneys in our reporting, which help us peel back layers of companies and businesspeople and point us to other records we may not have known existed. We sure wish we had subpoena power, though!”

Let’s proactively build bridges to our partner professions, such as investigative reporters, to leverage the knowledge and expertise of one another when fighting fraud. I can only imagine how much more quickly Ellis and Hicken might have unraveled the case if they’d had a CFE on their team.

Farewell and thanks

After two years of contributing to this column, I will be pursuing other professional development areas. I’ve had a wonderful experience working with the editorial staff of FM. I hope you’ve enjoyed reading this column as much as I’ve enjoyed writing it.

Steve C. Morang, CFE, is a senior manager at a Northern California-based CPA firm and president of the ACFE’s San Francisco Chapter. Contact him at steve.morang@yahoo.com.