Data Management Firm Execs Sold Data of Millions of Americans

Two former executives of Epsilon Data Management LLC were convicted of selling data on millions of U.S. consumers to perpetrators of mail fraud schemes, the Justice Department announced on May 31, 2024.

Robert Reger and David Lytle were found guilty of conspiracy to commit mail and wire fraud, alongside multiple counts of substantive mail and wire fraud.

Epsilon Data Management LLC, a prominent data brokerage firm, previously settled its criminal liability through a deferred prosecution agreement in 2021. The company paid $150 million in penalties and victim compensation, resulting in $122 million being returned to over 200,000 fraud victims.

The trial, which lasted two weeks, revealed that Reger, 57, and Lytle, 64, knowingly participated in a scheme that provided fraudsters with targeted consumer data. This data, collected and predicted using Epsilon's algorithms, was used to send deceptive mailings to millions of U.S. consumers over a decade.

Epsilon's transactional data from marketing clients enabled the company to predict “responsive buyers” from a database of 100 million households. Reger and Lytle leveraged this system to compile and sell lists of consumers to fraudsters.

Reger, who worked at Epsilon from 2005 to 2017, led the Direct to Consumer Unit, which played a pivotal role in the fraud. As a senior vice president, Reger oversaw the sale of nearly 100 lists to a single fraudster client and collaborated with numerous other fraudulent clients. Lytle, employed at Epsilon from 2012 to 2018 as a business development manager, recruited clients who engaged in fraudulent activities.

The trial featured testimonies from elderly victims and their families, who received scam letters promising large prizes. Witnesses included current and former Epsilon employees and three individuals who had previously pleaded guilty to conspiracy to commit mail fraud. These testimonies highlighted the extensive impact of the fraudulent scheme on vulnerable consumers.

Reger and Lytle face a maximum penalty of 20 years in prison for each count of mail and wire fraud, with sentencing scheduled for September 30. The convictions underscore the legal consequences of exploiting consumer data for fraudulent purposes.

For those affected by financial fraud, particularly individuals aged 60 or older, the National Elder Fraud Hotline offers support and resources. The hotline, managed by the Office for Victims of Crime, is available Monday through Friday from 10:00 a.m. to 6:00 p.m. ET at 1-833-FRAUD-11 (1-833-372-8311).