September 7, 2021
After decades of scamming people into paying inflated prices for toner cartridges, a Californian man has been prosecuted.
Over one six year period, Gilbert Michaels, 79, sold $126 million (€106 million) worth of toner cartridges to small businesses and charities, charging high prices. MarketWatch reported.
Michaels was accused of using telemarketers to sell the products as high as “10 times the retail price”. According to the report, the operation dates back to 1970s and he may have defrauded 50,000+ victims.
MarketWatch said that victims included “a YMCA, a California country club, a Christian preschool in Alabama, a tow truck company and a steelworkers union local in Kentucky.”
MarketWatch wrote: “In pre-sentencing court filings, Michaels’ attorneys said their client was a Navy veteran in poor health. They said the charges against him were rooted in the cut-throat nature of the toner sales business and that many of the allegations were based on accusations from biased competitors.”
Michael’s company IDC Servco and Mytel International controlled billing and shipping of the products, while the telemarketers sold the cartridges pretending to be toner salespeople from other companies who were in contact with the victims prior to them.
MarketWatch added: “Believing they were dealing with their regular suppliers; the victims would sign order confirmation forms. IDC would then ship toner to victims along with highly-inflated invoices. When the companies would complain, IDC would threaten legal action or to turn them over to collections agencies, prosecutors said. If IDC did agree to take the toner back, they would demand significant “restocking fees,” prosecutors said.”
The scam was detected because IDC sent invoices to a company in southern California who only uses typewriters in its business.
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