Federal Charges Filed in Office Equipment Leasing Scam

Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced that a federal grand jury returned an indictment against Kevin E. Welch for two counts of Mail Fraud and one count of Engaging in Monetary Transaction Over $10,000 in Property Derived From Specified Unlawful Activity.

Welch operated businesses that supplied office equipment, copiers and other equipment to schools, churches, community organizations and businesses in the Southern District of Illinois and elsewhere. The indictment alleges that from on or about 2001, and continuing through on or about October 2009, Welch engaged in a multifaceted scheme to defraud businesses and organizations, including a ponzi scheme, in providing copier equipment to organizations that were leased/financed through third-party lenders, then substituting and replacing copier equipment under new lease terms while falsely indicating the prior lease would be bought out or otherwise terminated by the new lease agreement. He is also accused of providing used copy equipment that was represented as new, fraudulent signing and revision of lease agreements, falsely representing that toner and service would be included as part of the lease, providing different equipment than what was leased and represented, and falsely representing himself as an employee and/or authorized representative of a company. The mail fraud counts allege that Welch engaged in a scheme to defraud the St. Boniface Catholic Church and the Governor French Academy.

On all of the counts, Welch faces a total statutory penalty of up to 50 years’ imprisonment, a fine of up to $750,000, or both, a term of supervised release of up to three years, and mandatory restitution.

The indictment follows an investigation by the United States Secret Service, the United States Postal Inspection Service, and the Internal Revenue Service/Criminal Investigations. The prosecution of the case is being handled by Assistant United States Attorney Norman R. Smith.

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