Former business owner in Costa Rica faces 86 months in prison

April 9, 2010

A former businessman in Costa Rica was sentenced to seven years and two months in prison by a U.S. Federal Court on Wednesday, after pleading guilty to charges of mail and wire fraud.

Stephen Schultz, who was living in Costa Rica, was arrested in December of 2008 after U.S. officials learned he had been operating a fraudulent business with false addresses in the United States.

Under the names Twin Peaks Gourmet Coffee Inc., USA Beverages and Cards-R-Us Inc., he sold business opportunities to potential victims, promising them substantial profits and continued support. But his commitments never materialized.

He was tracked through the U.S. Postal Inspection Service and arrested and extradited from Costa Rica. His partner, Jeffrey Pearson, was also arrested.

“We greatly appreciate the effort and cooperation of Costa Rican authorities in arresting these two defendants,” Gregory G. Katsas, assistant attorney general for the Justice Department´s Civil Division, said at the time (TT, Dec. 18).

In total, Schultz is convicted on 12 counts of wire and mail fraud along with conspiracy to commit wire and mail fraud. Judges will determine the amount Schultz owes in restitution after a hearing within the next 90 days.

His arrest comes during a nationwide campaign to crack down on business opportunity fraud.

In a Justice Department press release, Tony West, assistant attorney general for the Justice Department´s Civil Division, said, “Business opportunity fraud takes advantage of people trying to start their own business and make a living, or supplement their other income, but provides significant financial hardship instead of a new source of funds.

“Financial frauds as these operating from outside the United States are particularly insidious, but not beyond the reach of United States law.”


 

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