Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that MARK BERLIN, 63, of Boca Raton, Florida, waived his right to be indicted and pleaded guilty yesterday in Bridgeport federal court to one count of wire fraud related to his defrauding three restaurant groups of more than $3.5 million.
According to court documents and statements made in court, BERLIN owned and operated Fairfield Food Services, LLC, a Bridgeport-based food distribution business that bought meat, fish and other foods from wholesale vendors and then sold the items to restaurants and retail food distributors (“retail victims"). On a routine basis, BERLIN met with representatives for the retail victims to pitch them specific sales opportunities. Between April 2012 and April 2015, BERLIN made various misrepresentations to secure the sales, including claiming that he had arrangements with wholesale suppliers to obtain “futures contracts" from the wholesalers, and that the retail victims could “lock in" low prices if they paid for products in advance with delivery at a later date. BERLIN regularly told the retail victims that he had a “great deal" on particular products and the customers had to pay him fast in order to obtain the deals. BERLIN provided the retail victims with “Bill and Hold" invoices purportedly reflecting specific monies to be paid to the wholesale suppliers for products at the prices indicated. The retail victims then paid the “Bill and Hold" invoices in full with an understanding that the products or the futures contracts for products were being purchased from the suppliers.
The investigation revealed that BERLIN did not have “locked in" prices or “futures contracts" with wholesale suppliers, and BERLIN frequently used retail victims’ payments simply to cover his business’s immediate cash flow needs. In fact, instead of paying wholesalers before products were delivered, BERLIN typically did not pay the wholesalers for 30 or 60 days after products were delivered.
By April 2015, BERLIN was unable to keep the scheme afloat and stopped providing products to the retail victims. Shortly thereafter, Fairfield Food Services declared bankruptcy and closed its business. The Fairfield Food Services’ bankruptcy filing lists a total of approximately $5.3 million owed to three restaurant groups that paid BERLIN in advance for products, and hundreds of thousands of dollars owed to wholesale suppliers for products for which Fairfield Food Services had already taken delivery.
In pleading guilty, BERLIN contends that not all of the approximately $5.3 million owed to his retail victims was obtained by fraud. The government’s position is that BERLIN obtained at least $3.5 million and as much as $5.3 million by fraud.
BERLIN is scheduled to be sentenced by U.S. District Judge Stefan R. Underhill on Aug. 25, 2017, at which time he faces a maximum term of imprisonment of 20 years.
This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser.
Source: U.S. Department of Justice, Federal Bureau of Investigation (FBI)
