Infomercial Huckster Indicted for "Swindling a Sea of Victims" out of $50 Million
A federal grand jury in Phoenix, Ariz., indicted Lapre, 47, on 41 counts for conspiracy, mail fraud, wire fraud, promotional money laundering and transactional money laundering. The indictment accused Lapre of conning more than 220,000 consumers to invest in worthless online businesses via his company, "The Greatest Vitamin in the World."
"This indictment goes to show that if something sounds too good to be true, it probably is," U.S. Attorney Dennis K. Burke said in a statement. "Mr. Lapre used incessant nationally televised infomercials to hawk his vitamins and worthless websites as a way to get rich quick without working hard. His scams swindled a sea of victims, but thanks to the efforts of the Postal Inspection Service and the IRS, he will face justice."Between April 2003 and October 2007, according to the indictment, Lapre conspired with others to defraud hundreds of thousands of victims nationwide by persuading them to invest in an Internet-based, multilevel business.
Lapre's get-rich-quick scheme persuaded consumers to sell the Greatest Vitamin in the World online, as well as market the opportunity to others to do the same, and so on, thus convincing thousands of consumers to screw others the same way he was screwing them.
At its height, Lapre's Greatest Vitamin pyramid scheme ensnared approximately 226,794 hapless "investors" shilling his valueless vitamins.
"Home-based business opportunities have a certain appeal, especially in today's economy," Pete Zegarac, inspector in charge of the Phoenix Division U.S. Postal Inspection Service, said in a statement. "Consumers should be cautious of schemes that promise to bring in large amounts of money with little or no effort on their part."
In addition to peddling selling tens of thousands of worthless online businesses, the indictment also accused Lapre of perpetuating the scam by supplying his victims, known as "Independent Advertisers (IAs)," with phony sales records documenting non-existent vitamin sales. These glowing sales reports helped convince IAs to purchase additional advertising and services in the false hopes of earning commissions.
"This case demonstrates that the appearance of success can be a mask for a tangled financial web of lies," IRS Criminal Investigation Special Agent In Charge Dawn Mertz said in a statement. "As the web falls apart, it leaves investors with nothing. "
For four years, Lapre's massive scam defrauded hapless victims out of approximately $51.8 million. During the same period, some $6.3 million in commissions were paid to approximately 5,000 IAs to keep the scheme running.
If found guilty of any of the counts, Lapre faces many years in prison and hundreds of thousands of dollars in fines. A conviction for conspiracy carries a maximum penalty of five years, a $250,000 fine or both; mail fraud and wire fraud carry a maximum penalty of 25 years, a $250,000 fine or both; promotional money laundering carries a maximum penalty of 20 years, a $500,000 fine or both; and transactional money laundering carry a maximum penalty of 10 years, a $250,000 fine or both.
Victims of Lapre's scam are encouraged to submit a victim statement via the following website operated by the Postal Inspection Service: www.postalinspectorsurvey.com/vitamins. Victims can also follow the case's progress by visiting the following link on the U.S. Attorney for the District of Arizona's website: http://www.justice.gov/usao/az/us_v_donald_lapre_gvw.html