Ex-Systemax exec indicted over $7m bribe allegations
Carl Fiorentino steered more than $230m in business to suppliers in return for kickbacks, prosecutors allege
A former Systemax executive could face jail after being indicted on charges of taking bribes of more than $7m (£4.5m) from suppliers.
Carl Fiorentino steered more than $230m in business to suppliers in Taiwan and California over an eight-year period, the US government alleged in a seven-count indictment unsealed yesterday in a federal court.
Fiorentino – who headed up Systemax's TigerDirect retail and mail-order arm between 2003 and 2011 – was arrested by federal agents yesterday at his $8m Florida residence, which prosecutors allege was bought with fraud proceeds.
"As alleged in the indictment and court papers, Carl Fiorentino abused his position of trust, employing fraud and deceit to line his own pockets at the expense of his employer and its public shareholders," Brooklyn US attorney Loretta Lynch said in a statement.
"Fiorentino had it all: a lucrative job and a high-flying lifestyle. But as alleged in the indictment and court papers, his loyalties were neither to his employer nor its public shareholders but solely to himself. Fiorentino's greed spanned the Pacific Ocean to pull companies from California to Taiwan into his bribery and kickback scheme. We and our law enforcement partners will vigorously pursue and prosecute to the fullest extent of the law those who seek to profit by such fraud."
Systemax, which owns UK VAR Misco and WStore, stressed in a statement last night that the indictment relates solely to the actions of Fiorentino.
As part of his role as president of TigerDirect, Fiorentino was responsible for selecting suppliers to provide the retailer with PC components and peripherals.
The indictment alleges that, during his tenure, Fiorentino steered £157m worth of business towards a Taiwanese supplier in exchange for bribes and kickbacks totalling $6.5m. He also collected bribes and kickbacks of $570,000 in return for pushing $80m of business the way of a California-based memory supplier, according to the US government.
He allegedly concealed the payments by submitting false conflict of interest forms to Systemax and employing a complex web of wire transfers and shell companies.
If convicted, he faces a maximum sentence of 20 years' imprisonment on each charge.
Fiorentino was released on a $1m personal surety bond after his court appearance yesterday and is expected to appear in a New York court next month, according to a Bloomberg article.
Systemax stressed the indictment follows on from the internal whistleblower investigation it launched in 2011 which resulted in the termination of – among others – Fiorentina's employment at the firm. In September 2012, Fiorentina's brother, Gilbert, who was also placed on administrative leave following the probe, settled allegations with the SEC that he netted $400,000 in kickbacks from suppliers.