Baltimore, Maryland – A leading figure in a nationwide mail fraud scheme has been sentenced to 11 years in prison. Eric Epstein, 58, of Pompano Beach, Florida, was sentenced to 135 months in prison for conspiracy to commit mail fraud and conspiracy to defraud the Internal Revenue Service, followed by three years of supervised release. Epstein was one of the leaders in a scheme that defrauded thousands of businesses and non-profit organizations out of more than $50 million.
Epstein, along with co-conspirator Andrew Stafford, 58, of Bel Air, Maryland, admitted to perpetrating a nationwide fraudulent telemarketing scheme designed to ship unwanted and vastly over-priced light bulbs and cleaning supplies to unsuspecting businesses. The scheme involved making false representations to businesses, including that they had an existing business relationship with the company.
The victims of the scam included global conglomerates, small family-run businesses, government agencies, churches, schools, homeless shelters, and other non-profits. Epstein and his co-conspirators obtained tens of millions of dollars from the victims by deceiving them into paying exorbitant prices for light bulbs and cleaning supplies, as well as paying for products that the businesses never ordered.
Epstein used the ill-gotten gains to fund a lavish lifestyle, including luxury vehicles, a million-dollar home, and extravagant jewelry. He also failed to pay taxes on much of the money, further cheating the United States Treasury.
The scheme was perpetrated by Epstein and his co-conspirators through a series of shell entities, including Midway Industries, LLC and Johnson Distributing, LLC. Epstein sold a majority financial interest in Midway to Brian Wallen for $15 million in 2012, but he retained an ownership stake and continued to advise and supervise Midway employees.
U.S. Attorney Robert K. Hur stated that Epstein and his co-conspirators preyed on churches, schools, homeless shelters, and businesses to steal more than $50 million through a sophisticated scheme that involved sham sales of light bulbs and cleaning supplies. Federal agents and prosecutors will pursue perpetrators of such fraud schemes to recover money stolen from the victims and from the United States Treasury.
Epstein’s co-conspirator, Andrew Stafford, was sentenced to six years in prison for conspiracy to commit mail fraud. Both Epstein and Stafford will serve three years of supervised release after their prison terms.
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Key Facts
- State: Maryland
- Category: White Collar Crime|Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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