Xerox scammed with unrepaired forklift parts
Thursday, 17 June 2010
Rochester, NY, United States
A federal grand jury returned a 12-count indictment on a repair shop and 10 individuals for conspiring to defraud Xerox Corp of USD4.1 million over five years.
The swindle involved Xerox mechanics responsible for forklift maintenance placing false orders with Clarkson Auto Electric Inc, which charged the global document management company for parts that were not delivered and services that were not performed.
The indictment alleges that a Clarkson Auto owner picked up old and used forklift parts at a Xerox plant in Webster, New York, repackaged them at the repair firm's Clarkson, New York shop and delivered them as if they were new or had been repaired.
An internal Xerox audit in 2007 prompted an investigation that was conducted by the office of William J Hochul Jr, US attorney for the western district of New York State.
The scheme occurred from 1 January 2002 through 12 October 2007, according to the 32-page indictment, which lists dates, numbers and amounts of invoices and payments.
Indicted Clarkson Auto owners Anthonio Fretto, 72, of Webster; Matthew LaVilla, 66, of Spencerport; and Gerald Fretto, 46, of Ontario, all in New York State, allegedly used the funds primarily to pay personal debts and make investments. Each was named in multiple counts including money laundering and faces possible property forfeiture involving business and personal holdings.
The indictment names then-Xerox employees who were assigned to the inter-plant vehicle maintenance group with responsibility for repairing Xerox's forklifts.
Those indicted are James Noto, 42, of Ontario; Daniel Streff, 45, of Webster; Thomas Randall, 44, of Marion; Daniel Larocco, 44, of Ontario; Edward Hawkins, 51, of Marion; David Dailey, 40, of Bloomfield; and Randy Van Steen, 48, of Williamson, all in New York State. Each allegedly participated in the scheme and received kickbacks.
Mail fraud and conspiracy charges against them each carry a maximum of 20 years in prison, a USD250,000 fine or both.
Each of the 10 defendants entered a plea of not guilty during a 10 June arraignment and was released without bail.
The grand jury in Rochester was empanelled on 8 April and returned the indictments under seal on 8 June.
Norwalk, Connecticut-based Xerox reported profit of USD230 million on 2009 sales of USD17.61 billion. The largest population of Xerox employees is based in and around Rochester.
In disclosing the indictments, Hochul says that all companies - large and small - need to keep a close eye on people and contractors they employ.