COPIER LEASE PONZI SCHEME LEADS TO FEDERAL CHARGES
A man who already lost a civil suit involving fraudulent sales of copiers to a Belleville school is now facing criminal charges in federal court.Kevin E. Welch, 48, formerly of Okawville, has been charged in federal court in East St. Louis with two counts of mail fraud and one count of engaging in a fraudulent financial transaction involving at least $10,000.Steve Wigginton, U.S. attorney for the southern district of Illinois, announced the charges Monday. He said Welch operated businesses that supplied copiers and other office equipment to schools, churches, community organizations and businesses throughout Southern Illinois.
Wigginton said Welch engaged in a Ponzi scheme involving the leasing of copiers.
The prosecutor accuses Welch of "providing copier equipment to organizations that were leased/financed through third-party lenders, the substituting and replacing of copier equipment under new lease terms while falsely indicating the prior lease would be bought out or otherwise terminated by the new lease agreement, providing of 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."In January 2010, Governor French Academy won a $1.2 million verdict against Welch following a trial in St. Clair County civil court. But at the time, Welch said his finances had collapsed to the point that he no longer owned even a car. Even Gov. French Academy’s head administrator was highly doubtful that the judgment would ever be collected.
The charges of mail fraud allege that Welch defrauded Gov. French Academy and St. Boniface Catholic Church in Germantown.During the trial, Gov. French Academy’s attorney said there also had been complaints of fraud made against Welch by school districts and youth and senior centers that leased copiers in Sparta, Okawville and East St. Louis.Wigginton, in a news release, said Welch was last known to reside in Altamont. Welch has been issued a summons to appear in court April 14.The charges carry a maximum sentence of 50 years in prison and a $750,000 fine.