Man Charged with Fraud Scheme

U.S. Attorney's Office

Western District of Wisconsin

FOR IMMEDIATE RELEASE

Thursday, January 11, 2018

Man Charged with Fraud Scheme

MADISON, WIS. - Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced today an indictment charging Scott Reaston, 40, a citizen of Australia living in Madison, Wis., with an insurance fraud scheme. The indictment was returned on January 3 by a federal grand jury sitting in Madison, and was unsealed today following Reaston's arrest. The indictment charges Reaston with seven counts of mail fraud, one count of wire fraud, and two counts of money laundering.

Reaston was arrested outside a business in Madison today by IRS Criminal Investigation agents. He made an initial appearance in U.S. District Court in Madison today, and was detained in custody pending a detention hearing, which is scheduled for 11:00 a.m. tomorrow.

The indictment alleges that Reaston filed false insurance claims with the Parcel Insurance Plan (PIP). PIP provides insurance against loss or damage stemming from the delivery of parcels through the U.S. Postal Service and private carriers. The indictment alleges that from February 2013 through July 2015, Reaston submitted false claims to PIP requesting payment of over $480,000, and that he received payments of $364,183 for these claims.

The indictment alleges that Reaston created accounts in several names at Stamps.com, used the accounts to purchase postage for packages, and purchased shipping insurance through PIP for such packages. The indictment further alleges that Reaston submitted claims to PIP which falsely represented that cellular phones sold on various Amazon Marketplace stores were lost, damaged, or shorted during delivery. As part of the fraud scheme, Reaston allegedly submitted counterfeit documents to substantiate the claims, including counterfeit invoices, counterfeit purchase orders, and fabricated email communications with supposed customers.

If convicted, Reaston faces a maximum penalty of 20 years in federal prison on each mail and wire fraud charge, and a maximum penalty of 10 years on each money laundering charge. The charges against him are the result of an investigation by the U.S. Postal Inspection Service and IRS Criminal Investigation. The prosecution of this case is being handled by Assistant U.S. Attorney Antonio Trillo.

You are advised that a charge is merely an accusation and that a defendant is presumed innocent until and unless proven guilty.

Updated January 11, 2018