Acting U.S. Attorney Stephen M. Schenning announced Wednesday the owner of a Maryland telemarketing business was arrested in connection with a conspiracy to defraud the Internal Revenue Service.
Fifty-seven-year-old Eric Epstein of Pompano Beach, Florida – formerly of Owings Mills, Maryland – obtained approximately $50 million in property and money from several business through the illegal sale of cleaning supplies and light bulbs.
Epstein’s telemarketing business, Midway Industries, sold cleaning supplies and light bulbs to schools, businesses, nonprofits, government offices and churches. Epstein deceived those establishments by convincing them to pay for products they never ordered.
In 2012, Epstein sold a majority of Midway, but kept an ownership stake, continued to oversee employees and received a paycheck. Midway employees cold called companies and told them they had an existing relationship with Midway from 2003 through 2014. They would also send unwanted orders, make false representations and inflate prices of products up to 900% greater than the amount Midway paid for them.
Midway employees worked on commission and were offered opportunities to earn gift cards and financial incentives. Epstein and several others utilized Midway credit cards to purchase vehicles, luxury furniture and other lavish personal expenditures.
The mail fraud conspiracy charge carries a 20-year prison sentence and the conspiracy to defraud charge carries a 5-year prison sentence. Epstein’s initial appearance in court is scheduled for September 15.