Monday, June 25, 2007

A Prosper scam: The story of Jessica Wolcott

Jessica Michelle Wolcott is a girl in her early 20's who goes by the username of JessM on Prosper. She applied for a loan 6 times on Prosper, but was never funded because she has HR credit and lives in a state where the interest rate is capped at 15.75%. In the listings she claimed that her primary job was marketing and she made $60,000 per year. She also mentioned that she also did some modeling for Pantene Pro-V from which she pulled in an additional $10,000-$60,000.

After the six unsuccessful listings, a new listing appears. This time it is Jess's mom who has AA credit taking out a $20,000 auto-fund loan at 15% to help out her daughter. In this listing her mom claims that the reason her daughter has poor credit is not due to all the late payments and missed payments on the account. Instead, she attributes it to credit agencies misspelling her name.

The wording and writing style in her mom's post was very similar to Jess's original posts. Several lenders suggested that Jess probably wrote it herself and many have wondered whether she did so with her Mom's permission or whether she just borrowed her social security number and posted it without her mom's knowledge.

Alan, an active Prosper lender and frequent poster on the Prosper blogs, did a lot of work in the forums to warn people about inconsistencies in details of the different loan requests and warned that it was probably not a good idea to fund the loan. In spite of his warnings, some lenders couldn't resist 15% on a AA loan and the loan ended up funding anyway.

Okay, now on to the good stuff.

Several people on Prosper are good at detective work. When a large AA loan goes late right away it raises suspicions and people start to poke around to see if they can find out why. Their detective work and updates to the Prosper forum allow us to bring you this real life soap opera. The following is a summary of the story as it unfolds in the Prosper Forums.

First we learn that Jessica Wolcott, 22 years old, pleaded guilty to extorting $125,000 from a CEO of a fortune 500 company. She met him on Craigslist and then threatened to go public with details of the extramarital affair. The details were first reported on the Smoking Gun which reported that she used some of the money for an Apple laptop and a 2001 Saab convertible coupe. The mom's listing had mentioned that same Saab convertible. Through some detective work done by Prosper members, we later learn she purchased the Saab convertible on eBay and it had a salvage title. We also learn that she had stashed away 119 ounces of gold (about $74,000 worth) on deposit at e-gold. Apparently she hoped that money would be out of the court's reach. Upon arrest she surrendered what was left of the $125,000 and was then released on $15,000 bail. As part of her release agreement she was ordered not to travel or use a computer and was ordered to undergo psychiatric treatment.

On November 27, 2006 she changed her plea to guilty and was scheduled to be sentenced in February. At this time we also learn of some additional inconsistencies in the loan listings. According to Jess' mom, at one point she was in Australia to do a photo shoot yet, according to the US attorney, she never had a passport. We also learn that in April 2006 she was evicted for failure to pay rent. That doesn't jive well with the assertion that she had a wealthy mom and $24,000 in the bank.

The story is picked up by the national news media with a NY Post article and then a second follow-up article. From these we learn that the executive that was being extorted is Wandschneider from Pepsi Bottling Company, and that he had willingly given her $30,000 before she tried to extort more from him at which point he got the FBI involved.

PBS runs a report that Pepsi Bottling Group Inc., the worlds largest maker of Pepsi Cola products starts investigating whether Wandschneider used the computer for non-work-related activities following revelations that he had e-mail exchanges with a woman that tried to extort $125,000 from him.

At this point the "Mom" finds the posts about her daughter in the Prosper Forums and tries to defend her daughter. Many lenders wonder whether this poster is the mom, or whether this is the daughter pretending to be the Mom. The "Mom" claims that Prosper members had asked for explicit photos, dates, meetings in person, and other inappropriate requests in exchange for bids or lending money to her privately.

The story runs on Gawker and includes a mention of her Prosper loan attempts. The story links to her Prosper member page which has since had the content deleted. In spite of the fact that one of her bail provisions was that she could not use a computer she managed to delete the information in her Prosper profile, as well as the information in her MySpace pages.

As the story unfolds, Fox news runs a special where they talk to Jessica Wolcott's ex-husband Kyle Strait. He claims she stole $15,000 from his bank account and racked up the same amount in loans in his name while he was overseas in the military. He said "she has to be stopped" and explained that Wolcott's fantastic stories included claims that she inherited $56 million from her dad when he died. We also learn of another man, Domin Aleadri who became engaged to her unaware that she was already married. After breaking up with her she sent Aleadri sonograms claiming to be pregnant with twins, but he later learned that the fake sonograms were just another fraud.

We also now learn that because of this incident Wandschneider, the Pepsi Cola executive and father of three, is no longer employed at Pepsi Bottling Group. Company officials refuse to comment on whether he was fired or whether he resigned from his position which has a $6 million dollar annual salary.

Jessica's ex-husband, Kyle, joins the Prosper forum and says, "This is like a huge closure for me so it's good to see she finally spun so far out of control that other people got to see it. I'll never get back what she took from me, but the media and you guys are making up for that." She had told her ex-husband that she had 7 middle names Jessica Michelle Monica Elizabeth Dakota Raymita Tatiyanna Rachel Wolcott but that her real name was the Indian name Ewakailakaipu.

As the story hit papers in her hometown, other people who personally know Jessica join the forum and suggest that Jessica's mom wouldn't do anything to protect her and that she was kicked out of the house at age 15. This leads additional credence to what lenders assumed all along - that Jess was impersonating her mom when she took out the Prosper loan. These people also confirm that everything in the original loan requests from Jessica and the subsequent loan request is a hoax and completely untrue.

From these hometown friends of Jessica we learn of a past filled with a web of lies that include faking death, and sending pictures of herself all bruised up with bruises that were created with Halloween makeup. Other incidents included pretending that someone had broken into her apartment and tried to kill her. She went as far as calling the police to have some of her friends investigated.

ABC News runs a two page story that confirms that Wandschneider was fired from his position in the company. DealBreaker runs a story that claims that in addition to eight middle names and an Indian name, Jessica Wolcott has 50 different aliases on the internet.

Jessica's ex-fiance, Dominic Aleandri, joins the Prosper forums. Both he and Kyle, the ex-husband, get interviewed by Inside Edition. Dominic claims he still doesn't know who she really is, but that she was brilliant and clever in spinning her lies. He claims to think that maybe her Mom was involved in some of the schemes and in backing the world of lies about Jess.

February arrives and the U.S. probation officer assigned to the case requests an adjournment saying that Wolcott should first undergo additional psychological examination. The request is granted by the judge and the new sentencing date is set for April 20, 2007.

While awaiting her court date, Jessica is involved in a bar brawl that leaves her victim with 11 stitches. She is again arrested and ordered to wear a monitoring bracelet.

Once again there is a postponement in the sentencing, this time it is set for June 15th. As articles are written about this postponement we learn of additional scams involving the owner of a car dealership. To make a long story short, the owner met up with Wolcott in Florida, and quickly proceeded to buy her a NSX valued at $60,000. When she tried to extort him for additional money, he repossessed the car and tried to turn the tables on her by threatening to reveal her scam. She relented and decided to leave him alone.

The sentencing date has now passed and according to court records her sentencing has happened. Public records that are supposed to be available related to her sentencing are not available. Searches related to the case on PACER do not show any updates. Phone calls to the court indicate that her case is lost somewhere.

So, the mystery and intrigue of this Prosper soap opera continue. I will post major updates in the comments section of this article if and when they become available.

Update (12/19/07): Notorious Prosper borrower gets 21 months in jail

Update (2/10/2008): JessM in trouble with the law again


Michelle said...

Interesting story.

How does Prosper handle cases of identity theft and other illegal practices?

tom said...

This is a crazy story. I'd seen some of this on the Prosper forums but I didn't piece it all together until I read this article. I actually read that Gawker article as well but at the time I didn't know it was about a Prosper borrower.

I think that Prosper lenders probably do more detective work than a bank would after a loan has defaulted.

Anonymous said...

And now she has a couple of other women doing the same thing from a Prosper lender. Prospertutes??

Matt said...

In answer to the question on how Prosper handles identity theft, here is their official policy:

"In the event of a material default under a Note you purchase from Prosper under this Agreement that is the result of verifiable identity theft of the named borrower's identity, Prosper will repurchase the Note for the remaining unpaid principal balance. The determination of whether verifiable identity theft has occurred shall be in Prosper's sole discretion. Prosper shall not be required to repurchase a Note under this subsection until such Note is at least 120 days past-due, provided, however, that Prosper may in it's sole discretion elect to repurchase a Note at an earlier time."

There have been several instances of documented identity theft cases where Prosper has repurchased the loan to repay the lenders.

Amarymary said...

The Mother that people think defended Jessica is Jessica herself. Jessica lived with us and used our computer to supposedly communicate with her mother and brother. I found the mother's screen name in our old user files. Also the picture of the indian girl with the blond that is supposed to be her mother is not them either. I saw pictures of her when she was a little girl. By the way, she told us she was Hawaiin, and that she has MS, and of course that she is a millionaire but couldn't get her money until she is 25. Also she claimed her brother would send her $1000 a week. Money I believe she was stealing from Kyle. I also pieced together a receipt of withdrawal from Kyles account. It's a shame to think what did happen to this girl to make her this way? And where is her family? I would love to know if any truths have come out in the court room. I also did confront her on the lying long before she and my son broke up. She of course told me I didn't know what I was talking about. Obviously I guess I didn't.

Matt said...

amarymary - thanks for the update. This story keeps getting more interesting.

Anonymous said...

On July 6, 2007, I asked The Smoking Gun editor what happened to Jessica's sentencing and he indicated that it has been moved back once again until September.

Matt said...

Thanks for the update - I will check into it, and see if we can get the details.

Anonymous said...

I have tons of NUDE pics of this girl ...should I post them on the net for the world to see. Maybe I should charge a fee and get back some of the money she scammed from me ...

Matt said...

About the nude pictures - two wrongs don't make a right so I would encourage you to just move on and try to rebuild as much as you can. Also, as far as this blog goes we would like to keep things clean, so if you do post them I would ask that you please don't link to them from this blog

Thanks, Matt

Anonymous said...

Annoying...I am a honest Prosper lender and have never been able to get a loan despite my need.

Guess I just need to be a cute bimbo who lies...

Matt said...

She had trouble funding too. It took identity theft (worse than simply lying) for her to get funded.

With Prosper getting funded always comes down to interest rate and credit grade. If you are an HR borrower you will usually have trouble getting funded unless you personally know some lenders that are willing to help out.

Anonymous said...

Most prosper loans don't get funded. That may seem like its a lenders market, but the opposite is true. If you have B credit, 20% debt to income or lower, and low credit utilization...all you have to do is prime your loan with a secondary account. You have someone prime the loan, and then watch the frenzy... you will have literally hundreds of bids, driving the interest rate quite low. Some call it a pump and dump, but the point being, it isn't the pump and dump that is the problem...its the whole prosper system and how, from a lenders point of view, they have to take a pass on good loans, if they aren't going to be funded, and they have to jump on the crazy train, bidding down loans that are already too low, to get a winning bid.

The way to solve that, is only going to be when you don't have micro loans supposedly 'mitigating' risk. The fact, is, ROI is negative for many prosper lenders, and its because of the nutty much for mitigating risk. I think the loans have to be put up e-bay style, and one person has to fund the whole loan, and no bidding down. Place out your bid, and wait for a buyer, a single buyer.

The current system is madness.

Matt said...

Anonymous, I agree with some of your points. However, having one person fund the entire loan means that you would have to invest at least $20,000 and possibly more like $50,000 in order to have a diversified portfolio if you were required to fund the entire loan. This would eliminate all but the top 500 or so lenders.

Anonymous said...

She is the embodiment of pure evil.

Anonymous said...

She may not be getting anymore loans anytime soon, but she's still scamming rich men and telling the most entertaining lies! My brother was taken in by her and lost a few grand in the process. Evil, and without conscience. She seems convinced she will come out of this mess without jail time. Will she ever be sentenced!?!? Here's her myspace page:

Anonymous said...

Jessica's sentencing is moved back to November.

Anonymous said...

matt, Jessica was senteced yesterday, she will be spending the next 21 months behind bars... I guess she got more than a slap on the wrist, this is what she had told Wandschneider if he turned to the FBI. You can read the court document that was written by the FBI agent handling the case. It clearly states what this sicko wrote.

Anonymous said...

hahahahaha Very interesting story.

Post the Nudes!!

Anonymous said...

February 6, 2008 -- A sultry grifter waiting to start a 21-month prison term for trying to blackmail a Pepsi exec over his online dating has been busted for violating her bail yet again.

Jessica Wolcott, 23, was stopped last Thursday in upstate Lisle by State Police for an expired inspection sticker on her Nissan. The trooper discovered that her driver's license was suspended for prior traffic tickets.

During a search of the car, the trooper found $9,900 in cash in a plastic bag, and another $600 in her purse, police said.

Wolcott, who has been held by cops since then, was arrested Monday by the FBI after a White Plains federal court judge signed a bench warrant.

She pleaded guilty in federal court in 2006 to trying to extort Pepsi Bottling Group executive vice president Gary Wandschneider out of $125,000. She had sent him anonymous e-mails threatening to expose his secret online life months after meeting the married dad through an Internet dating service. She remained free on bail afterward.

Last May, Wolcott was put under house arrest after being busted for an upstate bar brawl and for lying about her identity. In October, she was hauled back into court after cutting off her electronic monitoring bracelet.

She was allowed to remain free on bail after her December sentencing, and was due to surrender to prison April 1. Dan Mangan

Judith said...

This story is amazing and compells me to start reading the forums!

Tom said...

Judith - you won't be able to do that easily. They were deleted. You can still find a copy of the former forums at

Anonymous said...

She should have focused on NY politicians instead of corporate execs.

Anonymous said...

The old Saying goes the apple doesn't fall far from the tree. Her Mother is getting a divocre, and she took him for everything he had. Debbie has worked one tax season during the marriage, and she ended up getting everything and than some. Not sure how either of them can sleep at night.

Getz said...

Wow, this chick is almost twin-like to my exgirlfriend, in many ways. Jenna slept around and lied to get whatever she could and used people until the tap went dry just like this girl.

L5 said...

To add a final bizarre twist, the Mom's loan was just PAID IN FULL. Wow.

Aleksey Kulichenko said...

Interesting story, thanks for the post. There are lots of scammers out there. Watch out who you lend to!

Anonymous said...

she is still at it im sure she just goes under a different name now.she goes under jessica michelle she is a sick person