WOMAN SENTENCED AND FIND FOR SCHEME TO DEFRAUD MANUFACTURERS

FROM: U.S. DEPARTMENT OF JUSTICE
Tuesday, April 30, 2013
New York Woman Sentenced for Scheme to Defraud Consumer Product Manufacturers

A New York woman was sentenced to 19 months in prison today for her role in a scheme to defraud consumer product manufacturers, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the Southern District of Indiana.

Dina Wein Reis, 49, was sentenced by U.S. District Judge Jane E. Magnus-Stinson in the Southern District of Indiana and ordered to pay restitution of $5,678,190 and a fine of $1 million.

Reis pleaded guilty on May 19, 2011, to a criminal information charging her with one count of conspiracy to commit wire fraud.

According to plea documents, between June 2003 and July 2006 Reis owned and operated a marketing business based in New York and used fraudulent means to obtain consumer goods at discounted prices from manufacturers and distributors of consumer products. Participants in the scheme "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 be distributed to a variety of outlets that were typically difficult for these manufacturers to reach on their own. The scheme included a marketing venture called the "Goody Pak Program," which distributed products free of charge to schools for school fundraisers and helped generate marketing information for these manufacturers.

Reis 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 when, in fact, she made few efforts and sold the majority of the products to wholesalers for a profit. As a result, a manufacturer in Indiana lost $180,000, and a Missouri manufacturer lost $500,000. Reis also agreed through her plea agreement to make restitution to manufacturing companies not specifically named in the information.

The cases were investigated by the FBI and the U.S. Marshals Service. The cases were prosecuted by Trial Attorney Matthew Klecka of the Criminal Division’s Asset Forfeiture and Money Laundering Section, formerly a Trial Attorney in the Division’s Fraud Section, and Assistant U.S. Attorney Winfield Ong of the Southern District of Indiana.