BRIDGEPORT, Conn. — The owner of a defunct food distribution business in Bridgeport has pleaded guilty to defrauding three restaurant groups of over $3.5 million, prosecutors said Thursday.
Mark Berlin, 63, of Boca Raton, Fla., waived his right to be indicted and pleaded guilty Wednesday in Bridgeport federal court to one count of wire fraud, said U.S. Attorney for Connecticut Deirdre M. Daly.
He faces up to 20 years in prison when sentenced Aug. 25.
He owned and operated Fairfield Food Services, 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. Berlin routinely met with representatives for the retail victims to pitch sales opportunities.
Between April 2012 and April 2015, Berlin made misrepresentations to secure sales, including claiming that he had arrangements with wholesale suppliers to obtain “futures contracts” and that the retail victims could “lock in” low prices if they paid for products in advance, according to court documents and statements made in court.
He regularly told the retail victims that he had a “great deal” on particular products and the customers had to pay him fast to get the deals.
The investigation revealed that Berlin did not have “locked in” prices or “futures contracts” with wholesale suppliers, and he frequently used retail victims’ payments to cover his business’s 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.
The Fairfield Food Services’ bankruptcy filing lists a total of $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 $5.3 million owed to his retail victims was obtained by fraud. The government’s position is that he obtained at least $3.5 million and as much as $5.3 million by fraud.