By Francisco Alvarado
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By Chris Joseph
By Michael E. Miller
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By Keegan Hamilton and Francisco Alvarado
By Jake Rossen
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The methods used by ARS's legion of proxy phone-tenders are comparatively simple and well-known. But above them rises a confusing tangle of more than two dozen companies, all of which lead back to Feder and Stolz. It's obvious that they've done well since Miss Cleo was introduced in 1999. What's not so obvious is exactly how many people and companies are involved, what they all do, and how much they make. Miss Cleo herself provides no answers; her 20 or so Web addresses lead to four sites: one offering a free three-minute tarot reading, one pitching a $19.95 per month club of "Miss Cleo's Elite Circle Of Friends," one pushing a contest for a Florida vacation to meet Miss Cleo (called "Miss Cleo's Magical Journey"), and one for "Miss Cleo's Tarot Shoppe," where visitors can buy, buy, buy Cleo-related items, including T-shirts. None gives any sense of the scope of the operation.
Feder and Stolz, who are cousins, go back in Florida's corporation records to January 1993, when they founded the venerable Psychic Advisors Network, which quickly changed its name to Psychic Readers Network. Soon accused of giving worthless advice, they started a short-lived call-in line with actual counselors called Professional Advisors Network in January 1994. It lasted only 19 months, while PRN sailed on with celebrity pitchmen including Philip Michael Thomas of Miami Vice and actor Billy Dee Williams.
Feder and Stolz were joined in 1994 by Thomas Lindsey, who partnered with them in three now-defunct companies. Those entities telemarketed weight-loss and hair-care products, says Lindsey, who was reached by phone at his Fort Lauderdale home. Lindsey now says he wants to keep his distance. "For more than six years, I've had almost nothing to do with these guys on a one-to-one basis," he says; his last business partnership with them, First Choice Communications, dissolved in September 1999.
In 1995, Quintel Communications of Pearl River, New York, formed a partnership called New Lauderdale with PRN to market psychic phone services. Quintel then bought out New Lauderdale in September 1996, giving Feder, Lindsey, and Stolz shares of Quintel in exchange. In May 1997, Feder and Stolz formed Access Resource Services as a collection agency for Quintel/PRN. Although it soon became the leader in psychic hot lines, Quintel watched its business collapse in scandal during 1998, when the Federal Trade Commission investigated complaints from hordes of callers who said they were billed hundreds of dollars for calls they thought were free. Feder was a director of Quintel at the time.
Feeling the heat, Quintel changed its name to Traffix and sold the bulk of its psychic business in 1999 -- to Feder and Stolz. (Quintel also bought back its stock from Feder, Stolz, and Lindsey.) That's when Access Resource Services became a full-scale psychic hot line. Through PRN, the pair paid Traffix $6 million in royalties for the use of its psychic marketing gimmicks. Traffix still churns out the mass e-mails supposedly from Miss Cleo.
Between May 1997 and December 2000, Feder and Stolz set up 16 more companies for various marketing schemes; all of them, including PRN and ARS, are run from the same office: the 10th floor of the International Building at 2455 E. Sunrise Blvd. in Fort Lauderdale. Their nameplate on the building directory still says Quintel Communications.
The enterprising duo's corporate maneuverings have undoubtedly brought wealth, at least to Feder, a 51-year-old native of New Jersey. In the late '80s, Feder owned a comparatively modest condominium in Portofino on the Intracoastal in Fort Lauderdale, according to the Broward County property appraiser's records. In 1991, he moved up to a $635,000 house on NE 19th Street in Fort Lauderdale. In April 1996, he and Lindsey bought a three-story, $3.5 million mansion on Isla Bahia Drive, on the water in one of Fort Lauderdale's richest neighborhoods. In September 1998, Lindsey sold his half to Feder. Half a dozen cars can be found parked at Feder's mansion, including three late-model Mercedes and a 1957 Ford. Bobbing at the dock out back is a 27-foot Sea Ray.
The 54-year-old Stolz, also from New Jersey, lives more modestly. He owns a condo in the gated and guarded Point of the Americas complex on South Ocean Boulevard, on Fort Lauderdale beach. He and Lindsey bought it in September 1995 for $335,000. In March 1998, Lindsey sold his portion to Stolz. The property's 2000 assessed value (which is less than its probable market price) is $441,410. Just last month, Stolz took out a $125,000 second mortgage on his condo. The lender: Traffix, formerly Quintel Communications.
During his rise to riches, Feder experienced some odd money troubles, as county court records show. In 1990, he was ordered to pay about $33,000 for an old debt and unpaid taxes, which he eventually paid. In October 1999, he and several others bought a condo in Oakland Grove Village, but less than a year later, First Union Bank foreclosed on the property, having never received a single mortgage payment. (Summons servers found the condo empty and couldn't catch Feder at his Isla Bahia home.) And in August 2001, Feder was sued for more than $17,000 he owed for glasswork done on his house; he paid this debt as well.
But most of Feder's legal troubles have come from his business associates. In October 1997, Boca Raton residents Kathy and Ronald Alarcon, owners of Psychic Solutions (a subcontractor for PRN), sued in Broward Circuit Court for money they claimed Quintel, PRN, Feder, and then-partner Lindsey owed them. Quintel and PRN countersued, and all parties reached an undisclosed settlement. Both suits were dismissed in March 1999; Kathy Alarcon says she's no longer in the psychic business and refused to comment further.