Mail House Exec Pleads Guilty to Fraud

FREDERICK, MD—A vice president and part owner of mail preparation specialist RMS Direct pleaded guilty to conspiracy to commit mail and wire fraud, the Gazette reported. Stephen Reid, 50, was accused of cheating clients out of more than $628,000, according to the U.S. Attorney's Office in Baltimore.

Reid faces a maximum sentence of 20 years in federal prison, a $250,000 fine and must forfeit $628,581, the Gazette said. He will be sentenced in July.

Another RMS Direct executive, President Chester Bigelow, was charged with conspiracy to commit mail and wire fraud. He is slated to be arraigned later this month.

Quoting the plea agreement, the Gazette said that Reid's company had contracts to prepare large-volume fundraising mailings, including pamphlets and brochures, for nonprofit clients. Beginning in 2005, Reid sent clients falsified statements that the materials had been mailed out, when they had not been mailed. Reid collected money from the clients for the incomplete work.

In the process, Reid and some RMS employees created false postage statements, forged the signature of the U.S. Postal Service's acceptance clerk and created a false impression of the special postal service date stamp used on the postage statement, the paper said, quoting court documents.

In all, 19 clients—including the Special Olympics and Disabled Americans Veterans— were cheated out of $628,651.