The owners of a Baltimore firm accused last year of a fraud involving mail-order office supplies were indicted yesterday in Atlanta as U.S. postal inspectors wound up a nationwide investigation of illegal sales of office copier supplies.
Postal inspector Thomas McLure said those named in the indictment allegedly tricked firms into ordering copying machine supplies at inflated prices by pretending to be a regular supplier with a "special deal" for customers.
Postal inspectors had nicknamed the participants in the plan "toner bandits" because they specialized in selling the expensive toner that produces the images in copying machines.
McLure said the indictments handed down by a federal grand jury in Atlanta included charges that the office supply firms committed mail fraud by falsely promising the Maryland attorney general that they would cease allegedly illegal activities in the state.
Along with the Atlanta indictments, postal inspectors announced that James A. Hall of Alpharetta, Ga., an Atlanta suburb, pleaded guilty in Baltimore to one count of mail fraud.
Hall was identified as the president and part owner of J.D. and Associates, Inc., a holding company that owned United Toner Co. Inc. and MidStates Chemical Co. of Baltimore. Midstates was named in a fraud complaint filed by postal inspectors last year; a continuing investigation led to the parent company in Atlanta, McLure said.
United Toner was indicted on 21 counts of mail fraud and 5 counts of wire fraud, J.D. & Associates was named on 22 counts of mail fraud and 5 counts of wire fraud, and Total Office Supplies Inc. was indicted on 6 counts of mail fraud and 5 counts of wire fraud, McLure said.
Also indicted on wire and mail fraud charges were Dennis M. Fader, a co-owner of J.D., United and Midstates, and Kemp Lee Henry, an employe of the firms.