Lead Defendant Sentenced in Multi-Million-Dollar Fraud Scheme That Targeted Indiana Businesses
Lead Defendant Ordered to Repay More Than $5 Million, Faces Court-Ordered Fines of $1 Million
|U.S. Attorney’s Office April 30, 2013|
INDIANAPOLIS—First Assistant U.S. Attorney Josh Minkler announced today the sentencing of a defendant who engaged in a fraud scheme targeting companies across the country, including at least one business in Indiana. At a hearing this morning, U.S. District Judge Jane E. Magnus-Stinson ordered Dina Wein Reis, age 49, of New York, to serve 19 months in federal prison, as well as pay restitution of $5,227,340 to the victim companies. Reis was also ordered by the court to pay a $1 million criminal fine. Two additional defendants will be sentenced later this afternoon.
“The $7 million in financial penalties imposed in this case amounts to the largest white-collar criminal fraud judgment in Southern District history,” said Minkler. “This includes restitution, a fine, and forfeiture—and it has all been paid. We believe that these penalties not only provide restitution to the victim companies but also serve as a deterrent for those who seek to make their own fortune at the expense of Hoosier businesses.”
In 2011, Reis entered a plea of guilty to one count of conspiracy to commit wire fraud. According to court documents, Reis owned and operated a marketing business based in New York between June 2003 and July 2006. Reis has admitted that in the course of operating that business, she used fraudulent means to obtain consumer goods at discounted prices from manufacturers and distributors, which she would then sell at a personal profit.
As part of the scheme, Reis and her conspirators “cold-called” executives at large consumer product companies to solicit their products, falsely promising that if each manufacturer sold its products to Reis, the products would then be distributed to a variety of outlets that were typically difficult for these manufacturers to reach on their own. This included a marketing venture called the “Goody Pak Program,” which distributed products free of charge to schools for school fundraisers and help generate marketing information for these manufacturers.
Reis has since admitted that she negotiated a discount from the manufacturers based on the possibility of future profitable business for the manufacturers arising from her marketing efforts. In actuality, Reis made few efforts to follow through on these promises, and she ultimately sold the majority of the products to wholesalers for personal profit. Among other losses charged by the government, a manufacturer in Indiana lost $180,000, and a Missouri manufacturer lost $500,000. Per the terms of her plea agreement, Reis must make restitution payments to qualified victim companies, whether or not they were specifically named in the charging documents.
Two additional defendants are scheduled to be sentenced by Judge Magnus-Stinson this afternoon. Both Sheryl Raport, age 46, and Chaya Cooper, age 44, are New York residents who have also entered guilty pleas to a charge of wire fraud related to their roles in the scheme.
Today’s sentencing hearings come as the U.S. Attorney’s Office has prioritized the investigation and prosecution of fraud, waste and abuse on the part of public officials and those in positions of trust. As part of this effort, in 2012, the office created its first Public Integrity Working Group to assist in the investigation and prosecution of cases involving public corruption and white-collar crimes.
These cases were the result of a collaborative investigation by the Federal Bureau of Investigation and the U.S. Marshals Service. The cases were prosecuted by Assistant U.S. Attorney Winfield Ong, with assistance from Trial Attorney Matthew Klecka of the Department of Justice’s Asset Forfeiture and Money Laundering Section.