Former Epsilon Employees Found Guilty of Selling Consumer Data to Fraudsters
In a scheme that spanned ten years and over 100 million households, two former executives at Epsilon conspired with known scammer clients to engage in widespread mail fraud.
Robert Reger, 57, of Boulder, Colorado, and David Lytle, 64, of Leawood, Kansas, were convicted in a U.S. District Court in Denver, Colorado, for selling consumer data to be used in mass mailing scams, according to a Justice Department press release.
Former Epsilon Vice President Steven Fritz Kessler pleaded guilty to conspiracy to commit mail fraud for his participation in the scheme in 2018. Three years later, Epsilon paid $150 million in penalties and victim compensation. The effort has compensated over 200,000 victims to the tune of $122 million.
Reger and Lytle were the key players in a scheme that sold targeted lists of consumers and their addresses to fraudsters known to send “false and deceptive mail to consumers over the course of 10 years.” Evidence that came up during the trial showed that they used Epsilon’s sophisticated algorithms and database of 100 million households to generate lists of consumers and find new ones who might be susceptible to the kinds of fraud the defendants’ clients engaged in.
The jury also found that Reger and Lytle and the team they worked with were aware that their data was being used in scams.
The target of these mail scams? Mostly older people.
A few of the scams detailed in the indictment centered around sweepstakes prizes and free astrology readings from an alleged famous psychic. With both scams, victims either sent in a check covering a processing fee for their prize or paid to have follow-up readings.
Court documents and testimony from Epsilon employees further showed that Reger, Lytle, and their teams continued working with these clients to enrich themselves through sales-based compensation, even as those clients were getting in trouble with authorities. In the sweepstakes mailing scam, for example, employees who worked with the client informed their colleagues to keep the client on a “short receivables leash” in case they were shut down. They didn’t want Epsilon to lose too much money.
During this period, Epsilon was one of the largest marketing firms in the country.
After the two-week-long trial, the jury found Reger and Lytle guilty of seven counts of mail fraud. They also found Reger guilty of six counts of wire fraud and Lytle guilty of 12 counts of wire fraud. Sentencing is scheduled for Sept. 30. The maximum penalty for each count is 20 years.
Charges were originally announced in mid-June of 2021, on World Elder Abuse Awareness Day. If you or someone you know lost money to one of these schemes, the Department of Justice may be able to help you.
Fraud is widespread, though, and you may have fallen victim to other schemes. You can report such crimes on the FTC’s fraud reporting site. Even if they can’t help your individual case, your information will be shared with over 2,800 officers who investigate fraud.
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