Two former executives of Epsilon Data Management were sentenced to federal prison terms after being convicted of selling targeted lists of U.S. consumers for the benefit of mass-mailing fraud schemes that defrauded hundreds of thousands of Americans out of tens of millions of dollars.

Robert Reger, 57, of Boulder, Colorado, and David Lytle, 64, of Leawood, Kansas, were convicted this past May of conspiracy to commit mail and wire fraud and numerous counts of substantive mail fraud and wire fraud. Reger received up to 120 months in prison, and Lytle received a 48-months sentence.

According to evidence presented at trial, during the course of 10 years, the defendants were key participants in a scheme that knowingly sold targeted lists of consumers and their addresses to perpetrators of fraud schemes involving the sending of false and deceptive mail to consumers, particularly elderly and vulnerable people. The defendants were convicted of committing crimes while working at data broker Epsilon, which used transactional data collected from marketing clients to predict new “responsive buyers” using computer algorithms and a database of 100 million U.S. households.

Evidence presented at the trial alleged that Reger and Lytle used Epsilon’s algorithms to predict and sell lists of consumers most likely to respond to the fraud schemes’ mailings. The defendants’ business unit worked with dozens of clients that sent scam letters promising large prizes or falsely personalized astrological mailings promising wealth.

Evidence at trial alleged that the defendants’ helped facilitate harmful fraud on the victims whose data they sold. For example, the defendants sold nearly 100 lists of names and addresses to a particular client who used the data to defraud more than 218,000 victims of more than $23.7 million. Epsilon’s data showed that many victims were repeatedly defrauded by this single scheme, including more than 12,000 victims who were defrauded more than 20 times each. At trial, elderly victims and their adult children testified about the scam letters victims received falsely promising cash prizes.

Epsilon resolved its criminal liability in 2021 via a deferred prosecution agreement, paying $150 million in penalties and victim compensation. That victim compensation effort has returned $122 million to more than 200,000 victims of fraud schemes to which Epsilon provided data. A federal judge in 20223 ordered the firm to turn over records.

“Today’s sentences should make clear that those who illegally use Americans’ personal information to facilitate fraud will face serious consequences.” Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division said via a statement. “The Justice Department will investigate and prosecute individuals who use their access to our personal data to target vulnerable Americans for their own gain.”

“Far too often, we prosecute cases where criminals prey on the elderly and vulnerable,” Acting U.S. Attorney Matt Kirsch for the District of Colorado said via a statement. “This sentence demonstrates that those who exploit the most vulnerable in our society for financial gain will be prosecuted and held accountable for their despicable actions.”

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Source From Non Profit Times