Eric Stein

The U.S. Attorney and Postal Inspection Service announced Tuesday that Eric Stein, age 53, had been arrested and charged "with running an investment scam through Return-A-Pet LLC--a Manhattan-based company he operated..." Authorities who investigated Stein's business say he may have lined his pockets with up to a half-million dollars over the last 3 years by hoodwinking consumers into buying "sham Return-A-Pet distributorships using false and misleading advertisements."

This is familiar territory for Eric Stein.

The scam was huge. So big it even turned heads in Nevada. So big that when Stein, one of the main suspects, went on the run, his glamour shot made it onto America's Most Wanted. We're referring to Eric Stein's first scam, which was eventually covered by CNBC's American Greed, a documentary series exploring major league con games.

In that case, which occurred in the late 1990s, Eric Stein and a handful of co-defendants (one was memorably named Ina Liberty Bell) bamboozled investors into buying into direct response infomercials. The pitch was an attractive 50 percent return on a minimum $5,000 investment in only 3 months. Stein took that money, played the mogul and also used it to keep drawing investors back into his web. He was charged with securities fraud and racketeering. Stein and his cohorts collected nearly $20 million.

According to the U.S. Attorney's press release about Stein's arrest on Tuesday, Return-A-Pet "provided enrolled pet owners with access to a toll-free number that was staffed 24 hours-a-day and printed on the pet’s ID tag, in order to help lost pets be returned to their owners."

On Return-A-Pet's now defunct website the service explained:

The Return-A-Pet registry is designed to give you peace of mind while protecting your privacy. Our system makes it easy for the person who finds your pet to get your beloved family member back to you quickly and safely.

Return-A-Pet distributors purchased a $5,000 package (Stein was apparently fond of that base $5000 fee to buy into his deals) which supposedly included 425 enrollment kits. If you just wanted a trial package of 10 kits, you could get away with paying just $100 to check it out.

People bought in, wiring fees ranging from $5,000 up to $50,000 to Stein's business bank accounts in Manhattan or mailing checks to his office on Fifth Avenue. Stein, who also may have used the alias "Robert Philips" when dealing with irate "distributors," allegedly kept the money. Court documents contain statements from victims in Texas, Georgia, Kentucky, North Carolina and South Africa who recounted conversations with both "Philips" and Eric Stein.

Stein ran Return-A-Pet while still on supervised release for the scheme for which he'd been convicted in Nevada.

Speaking to CNBC 4 years ago about his big con, Eric Stein explained techniques he used to fool investors into thinking the business was legitimate, like fake references about how great it was. He also said, "Greed does not lead you down a road to success; it leads you down a path of destruction."

Stein currently faces charges of mail and wire fraud. If convicted on both counts, he could face up to 40 years in prison.

Eric Stein: A con man in his own words - YouTube.

The lines that snake around famed Manhattan burger franchise Shake Shack's outposts have become notorious for being ever-present, no matter which location one frequents. As is the smell of delicious hamburgers being deliciously assembled. So goes the struggle of working near a Shake Shack (full disclosure: the Observer has one on the same block, terribly):

Do you even chance it? Do you send subordinates to do your waiting for you? Or do you work at a company so capable of deriving infinitely complex financial instruments designed to filch zillions from the American economy that you have your own (mythical) Shake Shack grill, thus abstaining this concern from your universe entirely?

Or do you come up with a quasi-con designed to entertain you on your lunch hour, get others to pay for your lunch, and pick up pageviews?

Well, Gloss editor (and Observer columnist) Jennifer Wright took that last option and ran with it. Here's how the Shake Shack Con works:

1. Get someone to stand in line for you.
2. Take people's orders from the back of the line, with a fee attached.
3. Put a plant in line so you can get other people to go along with the plan, which isn't all that convincing and which is fairly sketchy on face-value.
4. Take the money, place the orders, collect the burgers.
5. Enjoy the cash you paid for your lunch with that you just made, and then some.

On the one hand, it's time consuming, requires an entire operation squad, and the payoff can't be that great. On the other hand, if you've got five people sitting around at lunch of a Friday near Madison Square Park, and you've got nothing pressing...it's actually not the worst idea.

They also made a video of it, which will just make you hungry for Shake Shack. Or get lunch-rich quick schemes.

fkamer@observer.com | @weareyourfek