NY socialite gets 19 months for corporate fraud
April 30, 2013 1:42PM
INDIANAPOLIS (AP) — A New York socialite who pleaded guilty last year to a federal charge that she duped corporations out of millions of dollars was sentenced Tuesday to 19 months in prison and ordered to pay her victims $7 million in restitution.
A federal judge in Indianapolis also fined Dina Wein Reis $1 million. Reis had pleaded guilty in May 2012 to a federal charge of conspiracy to commit wire fraud.
The Indianapolis Star reported Reis will remain free pending her placement in a federal facility.
Federal prosecutors said Reis, an art collector known in New York social circles, swindled companies in Connecticut, Indiana, Missouri, New Jersey and Kentucky out of at least $20 million. She could have faced up to five years in prison, but her plea agreement capped her sentence at no more than 31 months.
Reis was accused in a federal indictment of entertaining corporate CEOs at her home, telling them she represented a company looking for a new top executive. The indictment says Reis asked the CEOs to provide free or discounted goods for distribution by a network that supposedly provided products for use as samples or promotional packages for senior living communities and other special groups.
Court documents state that Reis and her partners claimed “she personally owned or controlled extremely valuable business ventures that could distribute, promote, and significantly increase the sales of the Corporate Victims’ products,” charging documents claimed.
“In actuality, these ‘business ventures’ were merely empty ‘shell’ companies that Dina Wein Reis would incorporate and control in order to effectuate her scheme,” the documents state.
Companies that had provided the free or discounted items believed their “products would enjoy the almost exclusive presence in Reis’ supposed vast network of retail outlets, allegedly including pharmacies, grocery stores, salons and hardware stores.”
But prosecutors said that Reis instead sold the goods for profit and used the money to help support her lavish lifestyle.
An investigation led by the FBI office in Indianapolis resulted in an indictment against Reis in October 2008. That indictment did not name any companies that were bilked.
Prosecutors initially filed for the forfeiture of properties she owned in New York, New Jersey and Florida and funds in nearly 200 bank and investment accounts, including two Swiss bank accounts. The also sought more than 60 paintings, prints and pieces of decorative art, including an Andy Warhol image of writer Truman Capote.