MANHATTAN MAN WHO RAN $500,000 PET-RELATED INVESTMENT SCAM PLEADS GUILTY IN MANHATTAN FEDERAL COURT
FOR IMMEDIATE RELEASE
Wednesday February 15, 2012
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ERIC STEIN pled guilty today in connection with a half-million dollar investment scam he ran through Return-A-Pet LLC, a Manhattan-based company he operated that purported to facilitate the return of lost pets to their owners. STEIN, who was arrested on January 24, 2012, ran the company while out on supervised release for an investment fraud scheme which he had been previously convicted of committing in Nevada. STEIN pled guilty before U.S. District Judge Miriam Goldman Cedarbaum.
According to the Complaint, the Indictment, and statements made at today’s plea proceeding in Manhattan federal court:
Return-A-Pet claimed to provide enrolled pet owners with access to a toll-free number that was staffed 24 hours-a-day and printed on the pet’s ID tag, in order to help lost pets be returned to their owners. From June 2007 to January 2010, STEIN sold sham Return-A-Pet “distributorships” for upfront fees that ranged from $5,000 to $50,000. He sold distributorships to individuals who lived all over the United States and abroad, including in Texas, Georgia, Kentucky, North Carolina, and South Africa. STEIN personally communicated with prospective distributors, often falsely identifying himself as “Robert Philips.”
To lure investors into paying him the upfront fees, STEIN made fraudulent statements and representations in Internet and print ads to convince victims that they were purchasing a bona fide business opportunity. However, after making payments to Return-A-Pet, the victims never received the materials and services promised to them as part of the distributorships. Rather, STEIN simply kept their money, taking in at least $500,000 over the course of the fraud scheme.
STEIN also referred prospective distributors to phony references – people whom he allegedly recruited to pose as distributors to provide fake testimonials of their positive experiences with Return-A-Pet. He rarely, if ever, returned victims’ money when they demanded refunds. Instead, in an effort to delay and appease victims, STEIN hired an employee to provide false information to them.
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STEIN, 53, of New York, NY, pled guilty to one count of mail fraud and one count of wire fraud. He faces a maximum sentence of 20 years in prison on each count. STEIN also is required to pay restitution to his victims in the amount of $528,000. STEIN is scheduled to be sentenced by Judge Cedarbaum on June 13, 2012.
Mr. Bharara praised the investigative efforts of the United States Postal Inspection Service.
This case is being prosecuted by the Office’s Complex Frauds Unit. Assistant U.S. Attorney Sarah E. Paul is in charge of this prosecution.