HARTFORD, CONN., DEC. 21 -- The FBI arrested three men today in an alleged $2 million-a-month scheme to lease nonexistent copy machines.
The FBI said in an affidavit that the defendants purported to sell the copiers to companies that buy used Xerox Corp. machines for leasing.
Randy T. Hilgert, 32, of Madison, Conn.; Thomas J. Becker, of North Kingstown, R.I.; and John F. Rodgers, of Arcola, Pa., were all charged with wire fraud, mail fraud and money laundering, said Milt Ahlerich, the FBI's special agent in charge of Connecticut.
Hilgert was released on $25,000 bond. The status of the other two men was not known. Federal agents seized property belonging to the three and records from the businesses involved.
In one example, Hilgert sold 14 used copiers to Banc One Leasing Corp. of Columbus, Ohio, which believed the machines would be leased by Becker Associates of Bridgeport, Pa., which was operating under the name Rhino Copy, the affidavit said.
Rhino Copy was supposed to be leasing the machines for Banc One and making monthly payments to the bank, the FBI said. Since it was receiving its monthly payments on time, Banc One decided to buy 10 more machines.
FBI Special Agent Marilyn Lucht went to Pennsylvania for Banc One to inspect the machines the company thought it owned, the affidavit said. She found about 90 copiers at Rhino Copy, but only six were operational.
Lucht said Becker and Rodgers told her all of their machines were leased, had been purchased by Hilgert and were refurbished by Centralized Services Inc.
Centralized Services was a vendor and refurbisher of the used copiers, the FBI said. However, Lucht said in an affidavit that the company "only exists on paper."
Like Banc One Leasing, buyers believed Rhino Copy would lease the copiers for them, the FBI said. The alleged scam relied on the buyers never having to see the machines, since they supposedly were being leased by a third party.
Sales of the machines averaged about $2 million a month, but in September, for example, lease payments totaled only $570,000.
"This is a typical pyramid scheme where an investor group pays in a large amount and is then paid back on a monthly basis," Ahlerich said.
"They think they are getting a terrific return on their investment, but the money is actually coming out of their original investment," he said.
Many victims were banks around the country. Ahlerich said several companies allegedly were victimized, but declined to specify.
As the broker for the machines, Hilgert allegedly deposited about $500,000 a week into an account at the New England Savings Bank in Madison, then wired 90 percent of the money to the Pennsylvania company. The bank, which said it knew Hilgert for years as a local carpenter and landscaper, notified the FBI about the deposits.
Centralized Services's president is a former Xerox repairman, Ralph Sylvestri, who has not been charged. The FBI declined to comment on his role in the investigation.