Manhattan Man Who Ran $500,000 Pet-Related Investment Scam Sentenced In Manhattan Federal Court To 63 Months In Prison
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ERIC STEIN was sentenced today to 63 months in prison 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 pled guilty in February 2012 to one count of mail fraud and one count of wire fraud, ran the company while out on supervised release after having been convicted in connection with an investment fraud scheme in Nevada. STEIN was sentenced today in Manhattan federal court by U.S. District Judge Miriam Goldman Cedarbaum.
Manhattan U.S. Attorney Preet Bharara said: “Providing a service that reunites distraught pet owners with their lost pets sounds like a winning business model, but unfortunately, this one was a fraud. It was not Eric Stein’s first investment fraud scheme, but with today’s sentence, it will hopefully be his last.”
According to the Complaint, the Indictment, statements made during Stein’s guilty plea, and other court proceedings:
Return-A-Pet claimed to provide enrolled pet owners with access to a toll-free number that was staffed 24 hours-a-day and that would help reunite them with lost pets. Enrollees were provided with ID tags for their pets that included the toll-free number so that if their pet was lost, whoever found the pet would have a number to call. 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 these distributorships to individuals in both the U.S. and internationally, 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 that were promised 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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In addition to the prison term, Judge Cedarbaum sentenced STEIN, 54, of New York, NY, to three years of supervised release, and ordered him to pay restitution to his victims in the amount of $528,000.
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.
Manhattan U.S. Attorney Preet Bharara said: “Providing a service that reunites distraught pet owners with their lost pets sounds like a winning business model, but unfortunately, this one was a fraud. It was not Eric Stein’s first investment fraud scheme, but with today’s sentence, it will hopefully be his last.”
According to the Complaint, the Indictment, statements made during Stein’s guilty plea, and other court proceedings:
Return-A-Pet claimed to provide enrolled pet owners with access to a toll-free number that was staffed 24 hours-a-day and that would help reunite them with lost pets. Enrollees were provided with ID tags for their pets that included the toll-free number so that if their pet was lost, whoever found the pet would have a number to call. 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 these distributorships to individuals in both the U.S. and internationally, 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 that were promised 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.
* * *
In addition to the prison term, Judge Cedarbaum sentenced STEIN, 54, of New York, NY, to three years of supervised release, and ordered him to pay restitution to his victims in the amount of $528,000.
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.
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