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. When the victim companies realized they had been scammed, they called IDC to complain. Believing that they were dealing with their regular supplier of toner supplies, employees at the victim companies signed order confirmation forms, which prompted Michael’s company to ship toner to victims and send invoices that demanded payment at inflated prices. The telemarketers typically told employees at the victim companies that the price of toner had increased and they had not been notified, however, the victims now had a chance to purchase toner at the previous, lower price. The indictment outlines a scheme in which telemarketers at a series of companies called victim organizations and claimed to be their regular supplier of toner or affiliated with those suppliers. “The actions of the defendants, some of whom became millionaires through the scheme, specifically targeted and victimized America’s small businesses and charities.” It is an honor to work with these agencies,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. Secret Service for their initiative and tenacity in following the evidence to what ultimately amounted to an enormous scheme. “I’d like to commend our partners at the Huntington Beach Police Department and the U.S. “The teamwork and tenacity of the agencies, investigators and prosecutors involved in this complex investigation is a testament to law enforcement’s united commitment to pursue accountability for criminals and justice for victims,” said Huntington Beach Police Chief Robert Handy. “Their long-term partnership and steadfast collaboration with the Secret Service and other law enforcement agencies led to the dismantling of a large-scale fraud operation, which impacted victims throughout the United States.” Secret Service’s Los Angeles Field Office. “This case originated from the initiative of the Huntington Beach Police Department,” said Special Agent in Charge L. “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.” “This toner fraud has been a tremendous burden on small businesses across America for many years,” said United States Attorney Eileen M. Those taken into custody in this district this morning are expected to be arraigned this afternoon in United States District Court in Santa Ana. Authorities continue to search for the final defendant. In addition to the 20 defendants arrested this morning, two other defendants have agreed to surrender in the coming days. Michaels owned and operated IDC SERVCO, a Culver City-based business that sold toner to small businesses, charities (such as Easter Seals Disability Services and the United Way), schools, churches, city governments and other entities in the United States and Canada. Michaels, a West Los Angeles man who had previously been ordered by federal and state court judges to cease fraudulent and deceptive business practices related to toner sales. The 30-count indictment, which charges 23 defendants, alleges a conspiracy that started in 1988 and was orchestrated by Gilbert N. The indictment unsealed after this morning’s arrests alleges that participants in the scheme fraudulently induced over 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 ten times the normal retail price. SANTA ANA, California – Federal authorities and Huntington Beach Police officers this morning arrested 20 defendants indicted by a grand jury on charges of participating in a long-running telemarketing scheme that targeted small businesses and charities by selling them toner products for printers and photocopiers at grossly inflated prices.
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