The editor of a magazine in the Champaign-Urbana area had previously promised the Illinois attorney general's office, in a consent decree, that she would not accept payments in advance of providing the products or services for which the payments are made.
But Holly Cunningham, who published Her Lifestyle magazine while using the name Rachel Spencer, sold magazine advertising space as a package to be used over the next 12 months to at least one local business.
Holly Birch Smith, who owns Holly Birch Photography in Urbana, said she paid Cunningham $1,000 for several units of advertising that could be used over the next year.
Cunningham signed the agreement with Attorney General Lisa Madigan's office June 1 after Madigan's office filed suit last July, alleging Cunningham sold ad space for a magazine that was never published in McLean County.
Cunningham said her lawyer told her that selling ad space in advance in Champaign wouldn't violate the agreement.
Her attorney, Mark D. Johnson of Bloomington, said he couldn't comment on that.
Cunningham has published May, June and July issues of Her LifeStyle and said she plans to publish the August magazine by Aug. 7.
"I delivered what I promised I was going to deliver," Cunningham said.
The magazine is printed at the Premier Print Group in Champaign, where the printer confirmed it is in production.
"We are in between having it designed and getting the final proofs done and approved," said Scott Moore, a partner at Premier Print Group, Friday. "We are waiting for that to occur."
Madigan filed suit against Cunningham last year in McLean County, alleging that Cunningham had sold at least $17,000 worth of ads in magazines that weren't published.
The magazine Cunningham ran in Bloomington was called Just 4 Her magazine.
The suit also alleged that Cunningham collected money and inventory for an event called the Navy Pier Midwest Baby Expo, and failed to return the money or inventory after the expo did not take place.
The suit was settled with an agreement between Madigan and Cunningham, in which Cunningham agreed that she couldn't accept payment or anything of value in exchange for products or services "prior to the provision of those products or services."
Cunninham was ordered to pay $1,960 in restitution for specific businesses, as well as $1,000 to the state to assist with the enforcement of the Consumer Fraud Act.
The agreement was not an admission of guilt on Cunningham's part, it stated.
Scott Mulford, a spokesman for the attorney general's office, said his office has taken some complaints about Her LifeStyle magazine in Champaign, and encourages those who have had problems to let the attorney general's office know. The office has a consumer hotline at 800-243-0618.
"We are taking the information and seeing if there may be a problem," Mulford said.
The Midwest Baby Expo was also the subject of nine complaints to the Better Business Bureau, said Jessica Tharp, vice president of the Better Business of Bureau Central Illinois.
Cunningham said those complaints were from customers who weren't happy with the turnout of an expo that was held in Minnesota. A second event was supposed to be held at Navy Pier, Cunningham said, but she couldn't sell enough booths to make the event happen.
Tharp said in general, people thinking about advertising should check with the Better Business Bureau and verify how long the company has been in business and if there have been any prior complaints.
She also encouraged would-be advertisers to "get everything in writing," because a contract can be verified or the basis for legal action, if needed.
Cunningham's consent decree, and the fact that she was using an assumed name in Champaign, came to light when one of the magazine's photographers and designers started investigating the business after not being paid for six weeks.
Champaign resident Missy Larson issued a statement about her experiences, saying she started working for the magazine in mid-April of this year, with a woman who identified herself as Rachel Walker-Spencer.
"I was promised a partnership which never materialized on top of an agreed-upon monthly salary," Larson said. "I received some initial payments, but when I had not been paid for six weeks, I began to press for payment."
Larson said Cunningham wouldn't attend meetings they agreed upon, and Cunningham ignored her calls and text messages.
"On July 12, 2012, I was informed via email by a person named Jesse, who I believed was Ms. Walker-Spencer's husband, that I was no longer part of the company," Larson said in a statement.
At that point, Larson discovered a news video that identified the person she knew as Walker-Spencer as Cunningham, and talked about the attorney general's lawsuit.
"I believed it was my ethical and moral duty to inform businesses with whom I had worked for the magazine of the information I had discovered," Larson said. "Maintaining the good relationships I have built with the local business owners whom I have worked closely with over the past several months is my priority now."
Larson said that when Cunningham was representing herself as Walker-Spencer, she told Larson she lived in Monticello.
Cunningham lives in LeRoy.
Larson said she's not making any allegations against Cunningham other than that Larson wasn't paid for work she did.
Cunningham said Larson has been telling other business owners about her history and conducting a "smear campaign."
Larson said that's not true.
"I don't have the time or the interest in a smear campaign," Larson said, adding that she's made no personal comments about either Cunningham or her husband. "Anything I have said about them is verifiable with the Illinois Attorney General and the McLean County Circuit Court. I have no interest in stalling the August magazine. I hope it is published."
Cunningham said she started Her LifeStyle magazine because it's always been her dream to create a magazine, and Champaign would give her a fresh start.
"It's been something I wanted to do my whole life," she said.
She said her attorney told her she could do business using a different name to get past the bad publicity of the past.
Johnson said he advised Cunningham after the agreement with the attorney general's office to run any business she had lawfully.
"I advised Ms. Cunningham to fully comply with any and all terms of the consent decree," he said, and to comply with Illinois law.
He said doing business using a different name would require someone to register the assumed name with the county clerk.
Neither the Champaign nor McLean County clerk's office has a record of Her Lifestyle Magazine being registered.
The corporation is registered with the Illinois secretary of state under the name of Cunningham's husband, Jesse Cunningham.
Johnson said he couldn't comment on the particular issue of whether Cunningham can sell advertising space in advance under the agreement with the attorney general's office.
Cunningham said she's produced everything she promised to advertisers.
"Yeah, I didn't go by my name, but I delivered what I promised and more," she said.