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Former TigerDirect President Indicted In $230 Million Laundering Scheme 109

Posted by timothy from the my-washer-won't-even-hold-that-much dept.
McGruber writes "Carl Fiorentino, known to many slashdotters for his regular hyperbole-filled emails advertising 'unbelievable' blowout pricing on memory, storage, other components, and overclocker specials, has been indicted in New York federal court on seven counts of fraud and money laundering charges. Fiorentino allegedly took more than $7 million in bribes and kickbacks in exchange for steering more than $230 million in business to the Taiwanese and California companies that made the payments."
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Former TigerDirect President Indicted In $230 Million Laundering Scheme More

Former TigerDirect President Indicted In $230 Million Laundering Scheme

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  • Throw the Book (Score:3)

    by mfh ( 56 ) on Thursday June 20, 2013 @10:11AM (#44060217) Homepage Journal

    Just throw the book at this guy. He's scum. This is precisely what's wrong with the corporations on our planet and there has to be some kind of accountability, not that it would do much good in convincing CEOs to play a fair game. It seems everyone is cutting corners these days.

    That is NOT how you grow a brand.

    • Re:Throw the Book (Score:5, Insightful)

      by Anonymous Coward on Thursday June 20, 2013 @10:25AM (#44060369)

      You're kidding right? Don't you know that every Fab manager in Asia does extra runs of chips under that table and sells them on the gray/black markets? Even large companies like Qualcomm know this, and they look the other way because they want the cheap chip production.

      Every public company is operating against the interests of their common employees, and FOR the interests of their upper management / board of directors (and indirectly the stockholder). Know this and you will be less confused as your buying power is slowly eroded to nil.

      • Re: (Score:1)

        by Anonymous Coward

        You're kidding right? Don't you know that every Fab manager in Asia does extra runs of chips under that table and sells them on the gray/black markets? Even large companies like Qualcomm know this, and they look the other way because they want the cheap chip production.

        Every public company is operating against the interests of their common employees, and FOR the interests of their upper management / board of directors (and indirectly the stockholder). Know this and you will be less confused as your buying power is slowly eroded to nil.

        Sigh. From TFA:

        He allegedly used the kickbacks to buy an $8 million residence in Coral Gables, Fla., furnishings for the home and pay his credit card bills, as well as pay for tennis coaching and the use of a hip-hop production company. “Fiorentino had it all — a lucrative job and a high-flying lifestyle,” said Loretta E. Lynch, U.S. attorney for the Eastern District of New York, in a statement. “But his loyalties were neither to his employer nor its public shareholders but solely

        • Sigh. From TFA:

          He allegedly used the kickbacks to buy an $8 million residence in Coral Gables, Fla., furnishings for the home and pay his credit card bills, as well as pay for tennis coaching and the use of a hip-hop production company. “Fiorentino had it all — a lucrative job and a high-flying lifestyle,” said Loretta E. Lynch, U.S. attorney for the Eastern District of New York, in a statement. “But his loyalties were neither to his employer nor its public shareholders but solely to himself,” she said.

          Yes, and everybody that has an American Express Corporate card uses their reward points only for business related activities, and when they visit a client and are offered lunch always politely refuses. Kickbacks exist from the janitor to the CEO. Either it's all okay or it's all bad.

          • Re: (Score:3, Insightful)

            by Anonymous Coward

            Either it's all okay or it's all bad.

            There is plenty of middle ground. Some places realize that some kinds of meetings will span meal times and that meals are included in some functions, so allow meals to be covered, with some cap on price, others allow small gifts up to a certain value to help with allowing samples and simple tools to be given. Others can allow more, but require things to be declared, so that if there is a problem it gets stopped right away and the interference is more clear. As long as things are open and known, it is a l

        • how is anyone surprised that the Type A personality was selfish?

      • There is NOTHING that will convince me at this point in the game that corporations are run for stockholders in *any* way, directly or indirectly.

      • Re: (Score:1)

        by mfh ( 56 )

        Don't you know that every Fab manager in Asia does extra runs of chips under that table and sells them on the gray/black markets?

        It's a logical fallacy to assert something is okay because others are doing it. If something is done by EVERYONE, and the result is GOOD for society, then that action is morally good. If something is done by EVERYONE and the result is BAD, then that action is morally bad.

        Every public company is operating against the interests of their common employees

        Stop buying things from public

    • Re:Throw the Book (Score:5, Funny)

      by dickplaus ( 2461402 ) on Thursday June 20, 2013 @10:28AM (#44060403)
      Let me explain to you how this works: you see, the corporations finance Team America, and then Team America goes out... and the corporations sit there in their... in their corporation buildings, and... and, and see, they're all corporation-y... and they make money.

    • Re: (Score:1)

      by cellurl ( 906920 ) *
      Dell did the same thing. Siemens did the same thing. What do you propose?

      • This isn't about TigerMax doing anything; it's about an employee of TigerMax cheating his employer.

    • Re: (Score:2)

      by Yakasha ( 42321 )

      Just throw the book at this guy. He's scum. This is precisely what's wrong with the corporations on our planet and there has to be some kind of accountability, not that it would do much good in convincing CEOs to play a fair game. It seems everyone is cutting corners these days.

      That is NOT how you grow a brand.

      Don't be so quick to judge. You don't know the details of the case. I'm willing to bet you don't even know which Federal statues were allegedly violated. All you have are prosecutor's comments.

      The feds have a 96% conviction rate in these types of cases. 90% of all their convictions are via plea deal. This is not because they are so good at finding criminals, but because many of the laws allegedly violated by these "scum" are so vague and wide-ranging that they are impossible to defend. Of the non-plea

  • so (Score:5, Interesting)

    by WGFCrafty ( 1062506 ) on Thursday June 20, 2013 @10:12AM (#44060235)

    So he laundered 7 million in kickbacks from steering $240 million in business, not a $240 million dollar money laundering scheme. Too bad he's not HSBC, the only government authorized money launderer.

    • I didn't know HSBC was part of the Fed... Oh wait, which government are we talking about?

      • Oh wait, which government are we talking about?

        Let me issue and control a nation's money and I care not who writes the laws. - Mayer Amschel Rothschild

  • Just call him Wile E. Cayote... (Score:1)

    by Anonymous Coward

    Super Genius-- gets $7mm in kickbacks, buys $8mm house... hmmm..... give me $7mm and I'm set for life, dammit.

  • Not surprising (Score:3)

    by sl4shd0rk ( 755837 ) on Thursday June 20, 2013 @10:23AM (#44060349)

    Pretty much the norm these days, and not just in the US but everywhere. People in places of unbalanced power breaching the law. He will not do the kind of "time", as you or I, if found guilty.

    • yeah,,,i was in vegas recently and a homeless-looking guy was just pulling a 6-pack out of the cooler when a store employee grabbed him and called the cops. he hadnt even left the store yet. i actually walked over and offered to buy the beer for the guy just dont get him arrested. they would not let me 5 minutes later the cops come and arrest the guy...for what i still have no idea.

      the point? that guy will probably do more time in jail then Carl will...oh yeah American justice sure.

      • Re: (Score:3, Interesting)

        by ScentCone ( 795499 )

        for what i still have no idea

        Exactly, you have no idea. Here's the likely explanation: trespassing. The store is private property, and the guy has probably been told to stay out because of earlier incidents. If you've been formally told you're not allowed in the store, and come in anyway, that's trespass. And it is a crime, and you get arrested for it. And no, it's probably not going to mean jail time unless you are a real ass and just keep doing it over and over again.

        Which has nothing to do with money laundering and the way it's

        • Re: (Score:3, Insightful)

          by Like2Byte ( 542992 )

          for what i still have no idea

          Exactly, you have no idea. Here's the likely explanation: trespassing. ...

          You're adding more conjecture to his conjucture? Interesting.

          • You're adding more conjecture to his conjucture? Interesting.

            No, I'm pointing out a common reason for exactly what he witnessed, as opposed to his vague handwaving and comparing of two utterly unrelated things.

            • unrelated? really i was commenting on the post where the person said CF will probably not do any time in prison...my comment had to do with the way America's legal system is constructed nowadays where two men can both commit crimes, one for basically zero dollar damage and one for millions, yet the jail industrial complex will make the zero dollar one actually suffer in jail.

              btw obviously i agree with the poster...CF will hire super lawyers and skip and thru the process...the homeless looking guy wont.

          • Re: (Score:1)

            by Anonymous Coward
            A possible counterexample is not necessarily proof that the counterexample is how it happened, but it is pretty solid suggestion that the original interpretation isn't certain.

  • maybe their prices will FINALLY come down then (Score:3, Informative)

    by slashmydots ( 2189826 ) on Thursday June 20, 2013 @10:24AM (#44060357)
    I'm so sick of TD always being 1-5% more expensive than Newegg when they ship almost everything from 1 state away in 1 day for ground charges and newegg ships from 3 locations that all take 4+ days to get to my state. I have a residential and business account at both and always wondered why, even at my volume for my business, TD just can't seem to get their crap together and lower their prices. They buy from the same places as Newegg! Well, this explains it. Hopefully now this asshole's replacement will pick from the cheapest supplier instead of one bribing him and lower TD's prices to compete with Newegg.

    • I've also found the prices, with shipping, to be less than competitive. However, I also live 5 minutes away from a TD retail location, and their prices -- when shipping isn't part of the equation -- are consistently 10-15% cheaper than any other option in my region, whether online or brick and mortar.

    • Re: (Score:3)

      by tocsy ( 2489832 )

      So you're saying that you're sick of TigerDirect shipping more quickly than Newegg for slightly more money? It sounds to me like they're offering something that their competition isn't, and they're charging a little more for it.

      I don't care either way - I switch between them both depending on who's cheaper for the component I'm buying - and I HAVE gotten stuff cheaper on TigerDirect than Newegg.

      • I just coincidentally live closer to their primary warehouse in Illinois while Newegg is on each coast and that's it. TD didn't locate close to me on purpose, lol.

    • Re: (Score:2)

      by gl4ss ( 559668 )

      that doesn't really explain it. he just laundered a a part of his profit margin, it's just tax evasion(if anything it was why their prices were comparable).

      what explains is this: they got faster shipping so they still get your business even if they're not the cheapest.

      • They actually got 1/5th of my purchases and newegg got 4/5 this year thus far. The only reason they're faster is because they're 1 state away. They don't actually ship any faster than Newegg. I run a retail shop that does computer repair and custom builds so it's nice to get orders in 1 day but if it costs $510 instead of $500 to build a PC because I got the parts at TD, my customers will go elsewhere. The margins on computers and computer accessories suck so I usually go to Newegg to make the most mone
    • really? I always compare newegg and TD (and simetimes check outpricewatch) and for my items anyway TD tends to be cheaper 9 times out of 10

  • Was I the only one? (Score:5, Interesting)

    by TWiTfan ( 2887093 ) on Thursday June 20, 2013 @10:25AM (#44060363)

    Was I the only one who always always found TigerDirect to be kind of sleazy? I mean, even back *years* ago, they always reminded me of those skeevy camera stores that are notorious for false advertising and bait-and-switch deals.

    • No, I also thought it was suspicious. They were always advertising on TV. I have never seen a NewEgg TV commercial. It's rare that companies in this industry advertise on television. Usually, they go where the market is: The internet, or trade magazines. If you advertise on TV, then you start to get Mr Joe Everyday ordering computers and components, and he doesn't know anything about it. My dad would always show me ads from TigerDirect and ask me if I thought it was a good deal. Now, I know why....

    • Re: (Score:2)

      by Elbereth ( 58257 )

      Ever since the early days, there has been a loud minority of people proclaiming that Tiger Direct is run by scammers. This reputation has kept me from ever buying anything from them. If these allegations are true, then maybe Tiger Direct does deserve that reputation.

      • Re: (Score:2)

        by bws111 ( 1216812 )

        These allegations have nothing to do with the company, it's customers, or any scam against it's customers. It is about an employee of the company who defrauded the company.

      • Re: (Score:2, Informative)

        by Anonymous Coward

        It's true. They don't even sell tigers.

    • As a long time patron of Tiger Direct I understand what you are referring to regarding their marketing but I have never had anything but excellent experiences with their web store. ( The more recent retail outlets are a different matter.) I have had a few defective parts over the years and I HATE dealing with returns but TD always made it as painless as possible for me and never questioned the return. I'd say all of the systems I have built have included at least one part sourced through them. It doesn't sp
    • I never ordered from TigerDirect. The prices were good. Too good. I was always concerned I was missing something and would get genuine Kingsten memory, or a sweet Inntel Processor.
    • I haven't ordered from them in a while, but their "great prices" often depended on rebates that had strict qualifications. i'd rather deal with New Egg, but sometimes TD is worth taking a chance. I don't think I ever had a problem with anything I got from them, besides collecting the rebate.

    • Nope, I always thought of them as extremely sleazy despite having zero corroboration. My brother buys from them all the time, the stuff comes in a very timely fashion and exactly as represented. One time, about 5 years ago, I even broke down and ordered a 500 watt modular power supply with 2 lighted fans and a bluish chrome finish for 20 bucks. I was sure there was a catch to this deal. Absolutely positive. A couple days later the power supply came, and it was super nice quality. It came with so many m

  • CEO (Score:2)

    by Jaysyn ( 203771 )

    He'll never see the inside of a prison for his crimes.

  • Someone didn't get paaiid!
  • I have been purchasing from TD for years and was so pleased with them that I bought shares in SYX. This was before Carl starting showing his ugly mug in some of the advertising. My first reaction to seeing him in the ads was "sleazeball". I hope Carl burns but that TD doesn't suffer by association.

  • and the consumer to some extent... but of course the consumer could always just buy from Newegg.

    Similar case involving Frys: company executive steers business to certain vendors in exchange for kickbacks [fugitive.com]

    • Re: (Score:2)

      by cdrudge ( 68377 )

      I find the picture in that article funny due to his frown, and the ad right below it to get the "smile you always dreamed of".

    • What was odd about the Fry's case was that many of the companies that got that business were actually lower-cost suppliers, like ECS. Right after that case broke, Frys stopped doing the really good CPU/Motherboard deals. So customers actually ended up worse off when they caught the guy.

  • Whoever it is that makes those awful "Black Friday in April", "May Black Friday" etc etc ads.
    I don't mind being notified about stuff on sale, but there is only one Black Friday, it's a specific event, and all the other idiotic ads just insult the intelligence of anyone who receives the emails (that, and the sales tend to suck).

    • Re: (Score:2)

      by west ( 39918 )

      there is only one Black Friday

      Heh. "Black Friday" is a piece of marketing fluff that accidentally happened to catch on. Trying to lend it gravitas beyond that is just silly.

  • In case you're wondering... (Score:5, Informative)

    by slashmydots ( 2189826 ) on Thursday June 20, 2013 @10:42AM (#44060575)
    They own: Tiger Direct, Tiger Direct B2B, Systemax, Infotel Distributors, Ultra, Global Industrial, Nexel, Misco, Speedgifter, WorldWide Rebates, Comp USA, and believe it or not, Circuit City.

    • Ah yes, the illusion of choice. It was found that over 99% of the subjects would accept it, provided that they thought they had a choice.

      Like the US Governmental system.

  • OT: My LAST experience w/ TigerDirect (Score:3)

    by GodfatherofSoul ( 174979 ) on Thursday June 20, 2013 @10:56AM (#44060713)

    I was looking for a RAID enclosure for my little VM setup. What I got was a hard drive array (basically a port extender) with a RAID card thrown in. I went back to look at the advertisement to see how I got it wrong, and the ad used very deceptive wording about "additional items" included. Very shady and one of those transactions that evaporates any trust you might have in a vendor.

  • I'm no lawyer, and never played one on TV, but that doesn't sound like money laundering, but rather payola [thefreedictionary.com].

    If I RTFA correctly, he received money from companies in exchange for steering business to them. Kind of like a beer company giving a bar a neon light or posters or other discount in exchange for trying to get their customers to buy that brand of beer...

    Money laundering would be taking illegally gained funds and turning them into legal appearing funds by funneling them through (seemingly) legitimate bu

    • Re: (Score:2)

      by swb ( 14022 )

      It's completely clear why this "steering" is illegal. I thought that's largely what sales WAS -- steering to company A over company B for reasons beyond simple differences in product quality or cost.

      I have to believe that this goes on all the time, everywhere. I used to get free lunches and unsolicited trinkets from vendors all the time. I never changed my buying habits based on this, but maybe for $7 million I might.

      I get why steering is undesirable from an economic perspective -- it's a huge economic

      • Re: (Score:2)

        by swb ( 14022 )

        Oops, that should read "It's NOT completely clear..."

      • Re: (Score:2)

        by bws111 ( 1216812 )

        Of course there is harm. If a vendor is willing to offer rebates because of volume (nothing illegal about that), then that rebate money belongs to the company. The employee keeping the money (and not informing the company) is fraud.

      • At some point, while I agree it is shady and not an ideal practice, it kind of seems like it's illegal because business management doesn't like it or get a piece of it, not because it represents material harm.

        The reason it is illegal is fiduciary responsibilty. What it boils down to is this: The people who own the company have hired this person to make business decisions which will maximize the profit (or maximize whatever specific metric was defined as his responsibility). When someone with a fiduciary responsibility takes a bribe, they are basically conspiring with the bribing entity to steal a money from the shareholders/business owner and taking a cut of that stolen money in the form of the bribe.

        ie: Y

        • Re: (Score:2)

          by swb ( 14022 )

          The assumption here is that the bribe is always paid by a company offering substantially above-market pricing for commodity products and that the price differential between fair market prices and bribery prices pays the bribe.

          I would argue that this form of kickbacks is much less common and less likely to happen. There almost always is intense scrutiny of costs and substantive overpricing will almost always be noticed, especially on recurring products.

          I think kickbacks are probably more common in situatio

          • In the situation where pricing is equal, it's hard to see where the crime is because the company doing the purchasing has nothing to gain or lose switching between vendors.

            Even with equal pricing, it all boils down to the purchaser pocketing cash due to the company/shareholders.

            So Company A offers to sell to you at $100, Company B offers to sell to you at $100.

            A bidding war starts, and Company A cuts their price to $70 Company B also cuts their price to $70 but says if you pick them over Company A, they will give you, personally, $5 per unit purchased.

            The ethical response is to turn down the $5/unit and instead purchase the widgets at $65/unit. The $5/unit is money which i

  • http://www.mercurynews.com/ci_11290227 [mercurynews.com]

    The Fry's CEO accepted all sorts of kickbacks to try to pay down his gambling debts. As I recall, he was only caught when an employee happened to find some incriminating paperwork he threw in a trashcan....

  • The article doesn't say. Is that info Public?

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