Two men, one from Colorado and the other from Kansas, were found guilty of several charges related to mail and wire fraud after being accused of illegally selling data on millions of Americans to scammers.
Robert Reger, 57, of Boulder, and David Lytle, 64, of Leawood, Kansas, were convicted of conspiracy to commit mail and wire fraud, along with several counts of substantial mail and wire fraud. Both worked for Epsilon Data Management , which has a customer base of 250 million U.S. customers, about 75% of the entire country.
The United States Postal Inspection Service was the lead agency investigating the case. The U.S. Attorney’s Office, which prosecuted the case in federal court, says Reger and Lytle knew they were selling data to scammers who targeted elderly and vulnerable people.
“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 in a statement. “This case is an example of the responsibility that both executives and companies have when it comes to collecting and selling personal data, and I hope other companies take note of the serious results of this case.”
The company is based in Texas but has a sales office in Colorado, according to the Department of Justice.
In this photo illustration, the logo of data brokerage company Epsilon is seen through a magnifying glass as seen on a screen April 16, 2024 in London, England. Leon Neal//Keynote USA/Getty Images
Reger and Lytle’s trial lasted about two weeks, during which prosecutors say the couple were involved in the scheme for about 10 years. The evidence presented in the indictment against them said that at least two forms of fraudulent mail were sent to the victims:
- Giveaway: These emails falsely appeared to be formal, personalized communications from a government agency, law firm, or other official entity. The form, content and structure of the mailings misled some consumers into believing that they had won a substantial sum of money, usually in a sweepstakes or other contest or game, but that, to claim the winnings, recipients first had to pay. a fee, tax or other sum.
- Astrology: These mailing pieces falsely led consumer recipients to believe that they had been specially selected to receive the mailing pieces because an astrologer or psychic had experienced a vision about them and would provide them with personalized information about them or supposedly unique items by a fee.
“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,” Inspector-in-Charge Eric Shen of the Criminal Investigation Group said in a statement. from USPIS. “We will continue to work tirelessly to ensure justice is served and prevent these crimes from happening again in the future.”
Reger and Lytle will be sentenced on September 30. Both face a maximum sentence of 20 years in prison for each count.
Epsilon Data Management, according to the U.S. Department of Justice, uses data collected from marketing clients to predict consumer activity. His website features a portfolio of work with companies and organizations including BP, Norwegian Cruise Lines, Yard House, ASPCA, Staples, and more.
In 2021, Epsilon Data Management settled with the Department of Justice and victims for $150 million over similar allegations. Later that year, its CEO Bryan Kennedy retired. And in 2018, Steven Fritz Kessler, former vice president of Epsilon, pleaded guilty to conspiracy to commit mail fraud for his role in the case. Court records show he was sentenced to five years of probation and ordered to pay a $29,000 fine.
And in 2011, Epsilon announced a data breach that it said affected 2% of the companies it counted as customers, and companies such as Target, Kroger, US Bank, JPMorgan Chase, Capital One and Walgreens alerted their customers in the moment of rape. Kennedy, while CEO, defended the company in a 2014 segment on KeynoteUSA’s 60 Minutes.
The company did not respond to a request for comment on Saturday. Lawyers representing the company and the defendants also did not respond to emails seeking comment.
Austen Erblat
Keynote USA
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