Two former Systemax executives have been charged for taking supplier kickbacks and hiding their ill-gotten gains from the tax authorities during their time at the US-based retailer.
Gilbert and Carl Fiorentino were charged in federal court yesterday by two separate informations and face five and 25 years in prison if convicted, the FBI said in a press release yesterday.
According to court papers, the brothers schemed to obtain more than $9m ($5.7m) in kickbacks and other benefits and concealed this illicit income from the Internal Revenue Services (IRS) before their employment was terminated by Sytemax in 2011.
Carl, who was formerly president of Systemax subsidiary TigerDirect, was yesterday charged with one count of conspiracy to commit mail and wire fraud and one count of tax evasion in connection with his efforts to hide his illicit income from the IRS. Gilbert, who was chief executive of Systemax’s Technology Product Group, was charged with one conspiracy to commit securities fraud and to impair the lawful functions of the IRS.
According to the infomations, the duo conspired to obtain unlawful kickbacks in exchange for steering business to the companies that paid the kickbacks.
One Asia components supplier alone is alleged to have paid the fraternal pair more than $9m in cash and undocumented payments in return for funnelling $230m of business its way.
Carl is alleged to have received more than $3m to pay for his waterfront residence in Florida and millions of dollars' worth of luxury furnishings. The court papers allege that Gilbert netted hundreds of thousands of dollars in cash from one supplier and gold coins worth more than $150,000 from another vendor, among other things.
The case was originally investigated by the US Attorney’s Office for the Eastern District of New York, which charged Carl last June with conspiracy to commit mail and wire fraud, multiple counts of mail and wire fraud, and money laundering. The case was transferred to the Southern District of Florida by court order in January.
Wifredo A Ferrer, US attorney for the Southern District of Florida, said: “Gilbert and Carl Fiorentino put their financial gain and lavish lifestyle ahead of their responsibilities as corporate officers and directors. They accepted kickbacks, driving up the price of the consumer electronics and passing the price increase to customers. The Fiorentinos took advantage of their positions of trust. But they didn’t get away with it.”
The two informations are only accusations and defendants are presumed innocent until proven guilty, the authorities involved emphasised.
Chief exec Jens Montanana claims Logicalis performed well despite 'currency headwinds'
All the photos from last night's event, which saw over 600 people congregate at the Hilton London Bankside
Five year deal with Essex NHS Trust will cover 400 sites, including hospitals, clinics and GP practices
18 individuals and three companies walked away as winners at CRN's inaugural Women in Channel Awards last night