23 Charged in $126 Million Toner-Fraud Scheme
Courthouse News Service reports that last week, police in Santa Ana, California, arrested 23 people, charging them with a $126-million telemarketing scam that defrauded more than 50,000 victims by selling them toner cartridges and printers at “grossly inflated prices.”
Those involved reportedly posed as the victims’ regular suppliers of toner, and charged them up to 10-times as much as the regular retail price for the toner. Some 50,000 victims are said to have been targeted.
Lead defendant Gilbert N. Michaels, of West Los Angeles, is alleged to have started the scam in 1988 after being ordered by state and federal judges to stop running toner-cartridge scams, the U.S. Attorney’s Office said. Michaels owned and operated IDC SERVCO, of Culver City, which sold toner to small businesses, as well as to charities such as Easter Seals Disability Services and the United Way, schools, churches, and city governments, prosecutors said.
The U.S. Federal Bureau of Investigation (FBI) praised California’s Huntington Beach Police Department, which began the investigation and participated with the FBI in the arrests.
The 23 defendants are charged with conspiracy to commit mail fraud, and at least one count of mail fraud. Michaels also is charged with five counts of money laundering. Every count is punishable by up to 20 years in prison, except two of the money laundering counts, which are punishable by 10 years.
For a complete list of defendants, visit Courthouse News Service here.
- November 2015: Four Arrested in Toner-Cartridge Fraud Scheme Said to Cost Xerox $7.2 Million
- November 2014: Beware of Toner-Cartridge Scams – California Town Scammed for $62,820.50