By Chad Bray
A New York man, who had previously served jail time in a separate fraud scheme, has been sentenced to more than five years in prison after he admitted earlier this year to running an investment scam related to a purported service to return lost pets to their owners.
Eric Stein, 54 years old, pleaded guilty to fraud charges in February in the scam, which prosecutors alleged netted $500,000 and involved dozens of consumers buying sham distributorships in a company called Return-A-Pet through false and misleading advertisements.
In addition to serving five years and three months in prison, Mr. Stein was ordered Monday by U.S. District Judge Miriam Goldman Cedarbaum to pay $528,000 in restitution.
Mr. Stein allegedly carried out the scheme while on supervised release after pleading guilty more than a decade ago in a $34 million investment fraud scheme in Nevada, prosecutors 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,” said Preet Bharara, the U.S. attorney in Manhattan. “It was not Eric Stein’s first investment fraud scheme, but with today’s sentence, it will hopefully be his last.”
Mr. Stein was featured in a August 2004 WSJ story in which he talked about his prior fraud. He was sentenced to eight years in prison in 2001 after pleading guilty to 73 charges, including securities fraud, conspiracy and money laundering.
He apparently started the new fraud in 2007, shortly after he was released from prison, prosecutors said.
The service purported to offer identification tags to be placed on pets that featured a 24-hour staffed toll-free number. Mr. Stein allegedly sold sham “distributorships” for the service to individuals across the U.S. and overseas for fees of $5,000 to $50,000, prosecutors said.
A lawyer for Stein didn’t immediately respond to a request for comment Monday.
Wall Street Journal (blog)