Man Convicted in $34M Fraud Is Accused of Running Pet Franchise Scam on Supervised Release

A New York man who pleaded guilty in a $34 million investment fraud more than a decade ago is accused of running a new scam involving a lost-pet business during his supervised release.

Eric Stein, 53, is accused of selling sham distributorships in a franchise called Return-a-Pet, report ABC News, Courthouse News Service and the Wall Street Journal Law Blog.

According to federal prosecutors, Stein claimed the franchises would sell pet collars stamped with a toll-free number. Pet owners who purchased the collars would pay a one-time fee of $20 in hopes that, if their pets got lost, finders would call the number where operators were standing by 24 hours a day. The operators would then consult a pet registry and call the pet owners so they could be reunited with their lost animals.

Would-be distributors paid fees ranging from $5,000 to $50,000, but did not get the promised pet tags and other materials, prosecutors claim (PDF). According to an affidavit by a postal inspector, investors complained they called the toll-free number and learned there was no pet registry. Stein is accused of raking in at least $500,000 in the scheme.

Stein was featured in a Wall Street Journal article and the program "American Greed" for his prior scheme involving the sale of direct-response TV ads.