Two now former executives of Epsilon Data Management were convicted in federal court of selling lists used to target millions of U.S. consumers, including senior citizens, for mass-mailing fraud schemes.

Robert Reger, 57, of Boulder, Colorado, and David Lytle, 64, of Leawood, Kansas, were found guilty of conspiracy to commit mail and wire fraud. In 2018, former Epsilon Vice President Steven Fritz Kessler pleaded guilty to conspiracy to commit mail fraud for his participation in the scheme.

Epsilon entered into a deferred prosecution agreement in 2021, paying $150 million in penalties and victim compensation. Epsilon was ordered last year to turn over records in the case.

The NonProfit Times reached out to attorneys for both Reger and Lytle but those messages were not returned.

During a two-week trial in the U.S. District Court for the District of Colorado in Denver, prosecutors argued Reger and Lytle were key participants who knowingly sold targeted consumer lists and their addresses to perpetrators of fraud schemes involving the sending of false and deceptive mail to consumers during a 10-year period. According to a statement from federal prosecutors, Reger and Lytle “committed the 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.”

Prosecutors argued Epsilon’s algorithms could predict “new lists of consumers most likely to respond to the frauds and that the defendants’ business unit worked with dozens of clients with scam letters promising large prizes or falsely personalized astrological mailings promising wealth.” Prosecutors showed evidence that names and addresses of millions of U.S. consumers were provided to perpetrators who engaged in fraud knowing that elderly and vulnerable people were being targeted. Evidence presented at trial showed that nearly 100 lists were sold to just one client.

Reger worked at Epsilon from 2005 to 2017. Reger was senior vice president overseeing the Direct to Consumer Unit when he left the firm. Lytle worked at Epsilon from 2012 to 2018 as a business development manager recruiting clients for the Direct to Consumer Unit.

Reger and Lytle were found guilty of conspiracy to commit mail or wire fraud. They were also found guilty of seven counts of mail fraud. Reger was also found guilty of six counts of wire fraud and Lytle guilty of 12 counts of wire fraud in connection with electronic shipments of names and addresses and other emails regarding the actions.

A sentencing hearing is scheduled for Sept. 30. Reger and Lytle both face a maximum penalty of 20 years in prison for each count.

“Defrauding elderly and vulnerable consumers will not be tolerated in the State of Colorado,” Cole Finegan, U.S. Attorney for the District of Colorado, said via a statement. “This case is an example of the responsibility both executives and companies hold when it comes to gathering and selling personal data, and I hope other companies take note of the serious outcomes of this case.”

U.S. Postal Inspection Service (USPIS) officials via a statement called the case “a significant victory in our ongoing efforts to protect older adults from fraud and exploitation.” Inspector in Charge Eric Shen of USPIS’ Criminal Investigations Group said via a statement: “These criminals preyed on some of the most vulnerable members of our community, and today’s verdict sends a clear message that such predatory behavior will not be tolerated. We will continue to work tirelessly to ensure justice is served and to prevent these crimes from happening in the future.”

The case has been working though the court for several years. A jury had been selected during January but a mistrial was declared due to a hacking case involving one of the defense attorneys.

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Source From Non Profit Times