Michigan Man Sentenced for Mail Fraud

Douglas L. Lepo, age 68, of Sterling Heights, Michigan, was sentenced today by United States District Court Judge John Adams in Akron, Ohio, to 51 months’ imprisonment following his plea of guilty to conspiracy to commit mail fraud, Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, announced today.

On September 28, 2010, Lepo pled guilty to a one-count Information which charged him with conspiring to commit mail fraud in a scheme to defraud various consumers in Ohio and elsewhere, by fraudulently enticing them to purchase a work-at-home business opportunity from his employer, EDI Health Claims Network, of Michigan. It was falsely claimed that EDI, for a fee of between $5,000 and $6,000, could enable individuals to operate a profitable work-at-home business involving electronic billing services provided to doctors and other health care providers. However, few purchasers of the business were successful.

Lepo, the Vice President of EDI, and Chester J. Mazzoni, EDI’s president, were sued in 2006 by the Federal Trade Commission. Eventually, the FTC liquidated the EDI company and, in 2008, obtained a judgment against Mazzoni and Lepo for $17.6 million. Both Lepo and Mazzoni declared bankruptcy, and the government was only able to recover $95,000 from the defendants, which was distributed to the over 3,000 persons who purchased the EDI plan.

"The sentencing of Lepo is a great result for consumers in the Northern District of Ohio and throughout the nation," said Jon Miller Steiger, Regional Director of the East Central Region for the FTC. "The conviction and sentencing obtained by U.S. Attorney Dettelbach's office sends a strong message that sellers of work-at-home business opportunities cannot defraud consumers."

Judge Adams did not order any restitution to be paid by Lepo finding that he did not have the financial ability to pay a fine or restitution. United States Attorney Steven M. Dettelbach noted, however, that Lepo is still liable on the civil judgment taken by the FTC. Judge Adams also ordered that, following his release from prison, Lepo be placed on supervised release for a period of three years.

Judge Adams ordered Lepo to self-report to the Bureau of Prisons to begin his prison term upon notification by the Bureau of Prisons as to the facility in which he will be incarcerated.

This case was prosecuted by Assistant U.S. Attorneys James C. Lynch and Henry DeBaggis, following an investigation by the United States Postal Inspection Service and the Federal Bureau of Investigation, Cleveland, Ohio.