Dina Wein Reis, corporate grifter, to plead guilty

Fortune has learned that the flamboyant, accused con artist plans to plead guilty to a felony conspiracy charge on Thursday, ending a lengthy federal investigation into allegations that she defrauded a slew of Fortune 500 companies of millions of dollars. (For more, see The alleged grifter who duped corporate giants.)

The deal, if approved by federal district Judge Jane Magnus-Stinson of the Southern District of Indiana, could expose Wein Reis to up to 31 months in federal prison — a dramatic fall from grace for the self-described philanthropist and art collector, who boasted luxurious homes in Manhattan, Westhampton Beach, Bal Harbour, and Jerusalem.

Under terms of the deal, Wein Reis must pay $7 million in restitution to her corporate victims, which include Roche, Unilever and Valvoline, a unit of Ashland (ASH).

Three of Wein Reis’s associates are also expected to plead guilty to felony counts. The government is expected to recommend probation.

Wein Reis was arrested in October 2008 on charges of conspiracy and wire fraud related to a product diversion ring she headed. Diverters operate in the little-known but large gray market in which consumer goods are bought and sold in channels unauthorized by manufacturers.

Her business model was audacious. To obtain product, Wein Reis and her associates would usually begin by cold-calling managers and executives at big-brand companies, dangling an offer of a high-paying job to replace her as the head of her company. At the right moment, with the executive believing that a job offer was on the table, Wein Reis would ask him to arrange a shipment of discounted merchandise from his current employer for a sampling program.

Reis, who disguised her identity with pseudonyms and shell companies, used the same ploy over and over — even retargeting companies that had cottoned on to the scheme.

Two companies — Unilever (UL) and Roche — fought back aggressively after realizing they’d been scammed, and cooperated actively with prosecutors. Roche, which settled a civil suit with Wein Reis, claimed she bilked it out of $10 million of diabetes-testing equipment. Unilever put its losses at $2.23 million in a deal involving detergent.

But while Wein Reis’s ruses were brazen and unethical, prosecutors realized that they might have difficulty proving to a jury beyond a reasonable doubt that her activities in most of the cases they investigated were criminal. Several of the so-called “victims” appeared less than sympathetic, as they had misled their own employers about their pursuit of job offers with Wein Reis. Other supposed victims seemed to know what Wein Reis was up to, and saw her as a way to get product out the door to make their quarterly numbers.

The government will file what is called a “criminal information” in which the government lays out the charge to which Wein Reis has agreed to plead guilty. Under this system, the defendant agrees to plead guilty and waive the right to indictment. The conspiracy count to which Wein Reis is pleading relates to a scam she conducted against the maker of Bon Ami cleaning products.

“Dina wants to put this whole case behind her and get on with the rest of her life,” says J. Richard Kiefer, one of her lawyers. “It is time to resolve the case.”

Wein Reis is expected to seek probation arguing that she is too emotionally frail to spend time in prison.