Ponzi scheme Copier Man Sentenced to 5yrs in Federal Prison

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Date: Tuesday September 11, 2012 08:39:19 am
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    Ponzi scheme Copier Man Sentenced to 5yrs in Federal Prison

    A man convicted of defrauding a Belleville school in a scheme involving leased copiers has been sentenced to more than five years in federal prison.

    Kevin E. Welch, 49, was sentenced Friday to five years and three months and ordered to pay $1.4 million in restitution, according to the U.S. Attorney’s Office.

    In November, Welch pleaded guilty in federal court in East St. Louis to two counts of mail fraud and one count of engaging in a monetary transaction over $10,000.

    Welch operated a Ponzi scheme that victimized at least 25 schools, churches, charities, community groups and businesses in Southern Illinois.

    For example, he took copy machine lease payments from Governor French Academy in Belleville and pocketed the proceeds. He also told school officials the lease was terminated when it was not.

    Philip Paeltz, the school’s head administrator, said he attended the sentencing.

    "We were one of three victims that got to talk and say how we were abused by Mr. Welch," Paeltz said. "We’re glad that finally this guy is going to be stopped from committing this fraud of other people."

    The academy won a $1.2 million verdict in January 2010. Paeltz has said the school has not received any money from the civil judgment and insurance covered about $30,000 in losses.

    Paeltz said the academy lost $500,000 in machines and lease payments. The school has paid off all the leases except for one, because a contact person has not been found, Paeltz said.

    "I don’t think we’ll ever see that (restitution) money," Paeltz said.

    St. Boniface Catholic Church in Edwardsville also was a victim.

    Prosecutors said Welch also provided used copy equipment and said the machines were new, provided different equipment than what customers ordered, fraudulently signed and revised lease agreements, falsely said that toner and service would be included in the lease and falsely said he was an authorized representative of the company.

    Welch continued the scheme after the FBI interviewed him in 2000 and 2002.
    Welch used to live in Okawville and his last known address was in Altamont. During the sentencing, officials said Welch began his career as a police officer but he was terminated because of a theft arrest.

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