Police nab 20 suspects in $126M telemarketing scheme

July 1, 2016

Federal investigators and Huntington Beach police teamed up Tuesday to arrest 20 defendants named in an indictment alleging a telemarketing scheme involving toner for copiers and printers that ripped off thousands of victims of $126 million.

The indictment, which was unsealed Tuesday, alleges there were more than 50,000 victims who paid more than $126 million for printers and photocopiers at prices 10 times higher than the regular retail value, according to federal prosecutors.

Telemarketers involved in the alleged scheme would pose as the victims’ regular suppliers of the products, prosecutors said.

The indictment charges 23 defendants in the alleged conspiracy that dates back to 1988. Prosecutors allege that Gilbert N. Michaels of West Los Angeles was the mastermind.

State and federal judges had previously ordered Michaels to stop fraudulent and deceptive business practices related to toner sales, according to the U.S. Attorney’s Office.

Of the 23 defendants, two others are expected to surrender to authorities soon and investigators were looking for the final defendant.

“This toner fraud has been a tremendous burden on small businesses across America for many years,” U.S. Attorney Eileen M. Decker said.

“The fraud had a tremendous impact on some victims, who reported a severe impact on their finances, and the collective losses caused by the fraud were massive.”

–City News Service

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