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Carl Fiorentino took kickbacks from suppliers, the feds say.
Carl Fiorentino, former president of online computer and electronic retailer TigerDirect.com, was indicted today on charges that he took at least $7 million in bribes from suppliers in Taiwan and California. TigerDirect is part of Systemax Inc., No. 25 in the Internet Retailer Top 500 Guide.
In a statement today, New York-based Systemax Inc. says it fired Fiorentino in 2011 after “an internal whistleblower investigation.” The direct marketer of computer gear and consumer electronics last year also accepted the resignation of Gilbert Fiorentino, the former CEO of its technology products group. He is Carl’s brother, according to a Systemax spokesman. Systemax has said little publically about the reason behind the resignations.
Carl Fiorentino’s bribery scheme began in January 2003 and continued through April 2011, according to the U.S. Attorney’s Office for the Eastern District of New York. Fiorentino allegedly entered into an “illegal agreement” with the owner of an unnamed Taiwanese company. In exchange for $6.5 million in “kickbacks and bribes,” Fiorentino had TigerDirect buy computer components from that firm, the district attorney’s office says.
Fiorentino also allegedly took $570,000 from an unnamed California supplier of computer memory modules and flash memory products, the district attorney’s office says.
The indictment alleges that TigerDirect paid at least $157 million to the Taiwan-based firm and $80 million to the California-based company—a total of $237 million.
Carl Fiorentino faces charges of mail fraud, wire fraud and money laundering. He allegedly used the money from the bribes to buy, among other products, an $8 million home in Coral Gables, FL. Federal agents arrested him this morning in that city, and he was scheduled for arraignment later today.
“Carl Fiorentino abused his position of trust, employing fraud and deceit to line his own pockets at the expense of his employer and its public shareholders,” says Loretta E. Lynch, United States Attorney for the Eastern District of New York. “His loyalties were neither to his employer nor its public shareholders but solely to himself.”
In a statement, Systemax said “the criminal indictment relates solely to the action of Fiorentino, [and] has no impact on the company or its management.”