Tuesday, March 16, 1999
Price Hill man to plead guilty in resale scam
BY BEN L. KAUFMAN
The Cincinnati Enquirer
Price Hill businessman Richard Elliot Siegel has agreed to plead guilty to interstate transportation of goods taken by fraud from two of more than 30 suppliers he admitted to cheating.
It was his second federal run-in in two years. Last February, he was fined for using children to sell candy at night.
In his plea agreement signed last week, Mr. Siegel, 40, of Capel Drive, admitted not paying for masking tape, gloves, cigarettes and other goods during the past three years.
The FBI said he resold the products or planned to resell them through his businesses — Tri-Star Distributing, Tri-State Distributing, Siegel's Grocery, D&D Sales, G&H Distributing and/or PC Distributing.
His plea agreement, negotiated by defense attorney Harry P. Hellings Jr. and Assistant U.S. Attorney Christopher K. Barnes, requires him to repay his victims, irrespective of whether they were included in the formal charges.
In return, the government agreed to ignore those other losses when it calculated Mr. Siegel's crimes.
Monday, Mr. Hellings said it was unlikely his client would be able to make restitution: “This boy doesn't have two nickels to rub together.”
Federal guidelines recommend tougher sentences for larger losses, and that concession could mean a lighter punishment. As described in the plea agreement, that means the total loss will be less than $1.5 million when the sentence is computed.
Sentences are increased when losses exceed $1.5 million.
The government also agreed to ignore other possible non-tax crimes arising from the same scheme.
In a statement of facts, which Mr. Siegel accepted as part of his plea agreement, FBI agent Steven Lane said the merchant suckered suppliers by:
• Providing false credit references.
• Paying for initial, small orders.
• Ordering larger quantities for which he sent checks that bounced or paid a “small portion” of the amount owed.
• Using a mediator to “lull” wholesalers into believing he intended to pay in full.
Losses listed by the FBI ranged from $7,850 to Brown Tape Products, Indianapolis, to $142,604 to J.F. Walker Co. Inc., a Blue Ash supplier for convenience stores.
“It was destined to fail,” attorney Hellings said, because his client would “buy low, sell lower. ... It was stupid.”
Mr. Siegel profited only so long as he did not have to pay and kept what he received when he sold the goods, Mr. Hellings said.
Mr. Siegel is in jail, awaiting a date with U.S. District Judge S. Arthur Spiegel to enter his formal guilty plea. According to the calculations in the plea agreement, Mr. Siegel faces more than a year in prison.
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