Nylon President Reports to Court This Month for Money Laundering Trial

How did a white collar crook from Philly come to run New York's indie fashion magazine?

Telemarketers affiliated with Mr. Hellinger’s companies would inform their marks that they qualified for $6,000 government grant, less a $259 processing fee. Senior citizens provided their bank information, but instead of a deposit, they received a pamphlet providing more information about government grants.

Mr. Hellinger’s company Netchex used the bank information to print checks without the senior citizen’s signature; another company sold the names and numbers of those who had fallen for telemarketing schemes to other telemarketers. Among his partners were Ronald Hellinger, Donald’s twin brother, and Michelle Quigley, who had previously run various consumer fraud schemes under the name Madame Arielle DuPont.

Mr. Hellinger and the gang reportedly sold those businesses in 2004 for $3.83 million plus contingency payments of up to $5 million, and founded something called the Payment Processing Company.

In 2007, a disabled grandmother living on pension checks who had been fooled not once but twice by one of Mr. Hellinger’s companies filed a class-action lawsuit against Wachovia Bank for serving as the telemarketer’s financial conduit. Wachovia paid $144 million in restitution, but since PPC had been shut down by a federal judge a year earlier, for enabling fraud, nothing happened to Mr. Hellinger.

Now US Attorneys have assembled a case against Mr. Hellinger and his associates directly, involving money laundering and illegal online gambling operations that PPC ran in 2005, including sportsbetting.com and betonsports.com. PPC allegedly accepted tens of millions of dollars from overseas gambling companies and distributed it to bettors in small checks cut from anonymous sounding companies like DTX Cubepay and UC Safetex. The indictment calls for Mr. Hellinger and his associates to forfeit $44 million to the government.

“I have no comment on the case or my role in any business that I am currently involved in or may have been involved with in the past,” Mr. Hellinger wrote the Observer.

Jami Pearlman and Jaclyn Jarrett did not return calls from the Observer. Mr. Hellinger still describes himself as Nylon’s publisher and Nylon Holdings’ president on Twitter, though he is not on the masthead, and the tweets are mostly about Inked.

Former Nylon employees say the New York editorial office has virtually no contact with the Philadelphia office, except following up on behalf of the occasional freelancer fighting for his or her check. But with the business office several hours away, an improbably functional office culture has developed, sources say. Founder and editor in chief Marvin Scott Jarrett has receded to more of a figurehead role, distracted by side projects like the short-lived Nylon records and Nylon films. According to former employees, months go by with him out of the office, although Ms. Jarrett has taken on more of an editorial role than is typical of publishers.

Meanwhile, a small and young staff carries the torch of New York independent fashion, a little bit glossier and safer than the pre-recession days. New international editions published in Mexico and Japan are said to be major moneymakers for the company, with low editorial costs. Even the US additions are pretty thick for a scrappy independent fashion magazine. Despite its rocky start, at some point publisher Jaclyn Jarrett seems to have figured out how to run a magazine business, now she just has to hope her one-time savior Don Hellinger doesn’t drag it down with him.

 

 

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