a jury convicted two former executives of Epsilon Data Management LLC (Epsilon) for their roles in a scheme that sold data on millions of U.S. consumers to perpetrators of mail fraud schemes. This case underscores the severe legal consequences for corporate executives who exploit consumer data for fraudulent purposes, particularly targeting vulnerable populations such as the elderly.

Case Overview

On May 31, 2024, Robert Reger, 57, of Boulder, Colorado, and David Lytle, 64, of Leawood, Kansas, were found guilty of conspiracy to commit mail and wire fraud and numerous counts of substantive mail and wire fraud. The convictions came after a two-week trial that exposed the defendants' key roles in a decade-long scheme to sell targeted consumer lists to fraudsters.

Key Facts:

• Defendants: Robert Reger and David Lytle
• Charges: Conspiracy to commit mail and wire fraud, multiple counts of mail fraud, and wire fraud.
• Company Involved: Epsilon Data Management LLC

The Fraudulent Scheme

1. Targeting Vulnerable ConsumersThe defendants sold targeted lists of consumers to perpetrators of fraud schemes that sent deceptive mailings promising large prizes or personalized astrological readings. These fraudulent mailings primarily targeted elderly and vulnerable individuals, exploiting their trust and hopes.
2. Utilizing Advanced AlgorithmsEpsilon used advanced transactional data and algorithms to identify “responsive buyers,” thereby creating new lists of potential victims for fraudsters. Reger and Lytle's business unit sold these lists knowing they would be used for fraudulent purposes.
3. Long-Term ImpactEvidence at trial showed that Reger and Lytle sold nearly 100 lists to a single fraudster client and had many other clients engaged in similar fraudulent activities. Victims and their families testified about the emotional and financial harm caused by these scams.

Legal Implications

Both Reger and Lytle face severe penalties for their actions. Each count of mail or wire fraud carries a maximum penalty of 20 years in prison. Sentencing is scheduled for September 30.

Corporate Accountability:

• In 2021, Epsilon resolved its criminal liability through a deferred prosecution agreement, paying $150 million in penalties and victim compensation. This effort has already returned $122 million to over 200,000 fraud victims.

Past Convictions:

• Former Epsilon Vice President Steven Fritz Kessler pleaded guilty to conspiracy to commit mail fraud in 2018 for his role in the scheme.

Law Enforcement and Prosecution

This case was a collaborative effort involving multiple agencies and law enforcement bodies:

• Investigating Agency: U.S. Postal Inspection Service (USPIS) Transnational Elder Fraud Strike Force
• Prosecuting Attorneys: Senior Trial Attorney Alistair Reader, Assistant Director Rachael Doud (Civil Division’s Consumer Protection Branch), Assistant U.S. Attorney Rebecca Weber (District of Colorado)
• Supporting Staff: Civil Division’s Consumer Protection Branch, U.S. Attorney’s Office for the District of Colorado

Protecting Elderly Consumers

This case highlights the importance of protecting elderly and vulnerable consumers from fraud. The Justice Department’s Consumer Protection Branch, alongside its law enforcement partners, continues to prioritize the prosecution of individuals and companies involved in fraudulent activities.

If you or someone you know is a victim of elder fraud, resources and support are available:

• National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311)
• Elder Justice Initiative Webpage: Justice Department’s Elder Justice Initiative
• Consumer Protection Branch: Justice Department Consumer Protection Branch
• Report Fraud: FTC Report Fraud or call 877-FTC-HELP

Conclusion

The conviction of Robert Reger and David Lytle serves as a stern warning to corporate executives about the severe legal repercussions of engaging in fraudulent schemes. It also emphasizes the critical need for vigilant oversight and ethical practices in the handling of consumer data.

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