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SUBSCRIPTION INVESTIGATION Medford vineyard owner's companies made millions by skimming off subscription sales, AG alleges Jeffrey Hoyal's companies made millions by skimming off subscription sales, AG says Comment By Thomas Moriarty Mail Tribune MailTribune.com By Thomas Moriarty Mail Tribune Posted Apr. 2, 2015 at 5:39 PM By Thomas Moriarty Mail Tribune Posted Apr. 2, 2015 at 5:39 PM » RELATED CONTENT • White City subscription sellers settle with AG for $3 million... » Social News State prosecutors say a successful Medford businessman with ties to the local wine industry is behind several companies involved in an elaborate magazine subscription scheme now the subject of a racketeering lawsuit by the Oregon Department of Justice. The lawsuit, filed Tuesday in Marion County Circuit Court by Senior Assistant Attorney General David Kramer, alleges that Southern Oregon-based Henry Cricket LLC and Maximillian Inc., among other companies, scammed consumers out of more than $20 million by fraudulently inflating newspaper and magazine subscription prices. Prosecutors allege that Jeffrey Hoyal, who's been developing a winery near Jacksonville with a former RoxyAnn winemaker, used Henry Cricket, Maximillian and other "consulting" companies he owned to control the bulk of the subscription-sales business through numerous company names. Other state attorney generals in New York, Minnesota, Missouri and Texas filed similar lawsuits. Hoyal gained local attention in 2008 when he began planting olive trees on a 140-acre parcel of his sprawling estate off Bellinger Lane. He lost a significant portion of the trees to the winter of 2009, and later replanted much of the land with wine grapes. According to Mail Tribune archives, Hoyal's land was first purchased by Reality Kats, a limited-liability corporation named as a defendant in the DOJ lawsuit. Jackson County property records list the total value of Hoyal's property at more than $2 million. Prosecutors say the consulting companies were used to manage and direct a number of subscription-marketing businesses based in the White City area. The companies allegedly misrepresented their authority to sell third-party publications and falsely claimed to offer the lowest subscription price available through thousands of unsolicited subscription renewal forms mailed across the country. Publications affected included the New York Times, Wall Street Journal and the Portland Tribune, court documents say.  Attempts to reach Hoyal Thursday for comment were unsuccessful. Prosecutors say the six direct-mail companies have generated more than 1,400 complaints to the state since 2010 from consumers and publishers regarding inflated prices. The business enterprise allegedly used a number of holding companies, including Maximillian and Reality Kats, to launder its profits, court documents claim. According to an affidavit by a state fraud investigator, other individual named defendants were unable to explain large payments, some as high as $150,000, regularly made to Hoyal’s companies. A business name used by one of the direct-mail companies identified in the lawsuit, Liberty Publishers Service, apparently was first acquired in 2003 by Raybor Management Inc., of which Hoyal was then president and CEO. Raybor's 2004 filing with the Securities and Exchange Commission described the company's direct-mail marketing arm, IC Marketing, as a "low cost provider of subscription acquisition, focusing on upscale consumers interested in higher-end business and lifestyle publications." In 2003, IC Marketing sued the publisher of Fine Woodworking magazine for sending notices to subscribers warning them of the company's solicitations. Lawyers claimed the notices were defamatory, but a judge ultimately dismissed the lawsuit. In 2004, a Marion County Circuit Court judged ordered IC Marketing to pay more than $70,000 to the state’s Consumer Protection and Education Fund after the DOJ filed a lawsuit making allegations similar to its current complaint. IC Marketing dissolved in 2006, but one of its former business entities, American Consumer Publishing, is named in the new lawsuit. Marion County court records don't yet list counsel of record for any of the defendants, but documents say the businesses and many of the defendants have been represented in the past by Medford attorney David P. Lennon, himself named as a co-defendant in a similar lawsuit filed Tuesday by the New York Attorney General’s Office. Lennon said Wednesday that he's represented several of the defendants in the past and likely will be representing some of them in the future, but couldn't confirm which ones. All will be "vigorously defending themselves" against all allegations of wrongdoing, he said. Jackson County property records show Lennon's home, located near Hoyal's on Bellinger Lane, was first purchased by Reality Kats in 2006 before being sold to Lennon in 2011. Marion County Circuit Judge Claudia Burton Tuesday approved a temporary restraining order on the defendants' bank accounts and appointed a computer forensic expert as a temporary receiver to secure electronic evidence at the White City and Eagle Point offices. Prosecutors filed a motion Thursday seeking expedited discovery of the financial records. Other individuals named in the suit are  Noel Parducci, Laura Lovrien, Colleen Kaylor, Shannon Bacon, Lydia Pugsley, William Strickler, Linda Babb and Rachel Worcester. Reach reporter Thomas Moriarty at 541-776-4471, or by email at [email protected]. Follow him at @ThomasDMoriarty. By Thomas Moriarty Mail Tribune MailTribune.com By Thomas Moriarty Mail Tribune Posted Apr. 2, 2015 at 5:39 PM » Comment or view comments Reader Reaction » STAY INFORMED Email NewsLetter Sign Up Today Sign up for our newsletter and have the top headlines from your community delivered right to your inbox. Southern Oregon Directory Featured Businesses Loading... 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