The Justice Department has indicted 23 people, including three Valley region residents, for conducting a $126 million scam selling toner for copiers and printers, the agency announced Tuesday.
The 30-count indictment includes charges against Jonathan M. Brightman, 49, of Westlake Village, who owned Copy Com Distribution Inc., Independent Cartridge Supplier and Corporate Products; Sharon Scandaliato Virag, 51, of West Hills, who owned XL Supply Inc.; and Frank Scimeca, 51, of Woodland Hills, who owned Supply Central Distribution Inc. and Priority Office Supply.
The long-running telemarketing scheme targeted small businesses and charities by selling them toner products at grossly inflated prices. The indictment alleges the conspiracy fraudulently induced more than 50,000 victims to send more than $126 million to telemarketers who posed as the victims’ regular supplier of toner products at prices as much as 10 times the normal retail price.
Many of the accused conspirators live in Orange County, and the case was developed by the Huntington Beach Police Department. The alleged conspiracy was based at a Culver City company named IDC Servco.
The indictment outlines a scheme in which telemarketers called victim organizations and claimed to be their regular supplier of toner or affiliated with those suppliers. The telemarketers typically said the price of toner had increased, however, the victims now had a chance to purchase toner at the previous, lower price. Believing that they were dealing with their regular supplier, the employees at the victim companies signed order confirmation forms, which prompted IDC to ship toner and send invoices that demanded payment at inflated prices.
When the victim companies realized they had been scammed, they called IDC to complain. The victims were told IDC could not cancel the order or refund money because the victims had signed order confirmation forms, according to the indictment, which further alleges that IDC failed to disclose its relationships to the telemarketing companies that had actually brokered the fraudulent deals.
In many cases, the indictment alleges, IDC employees threatened victims with collections or legal action if they did not pay an invoice.
All 23 defendants are charged with conspiracy to commit mail fraud. The charges carry a statutory maximum penalty of 20 years in federal prison.