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Former TigerDirect President Indicted In $230 Million Laundering Scheme

timothy posted about a year ago | from the my-washer-won't-even-hold-that-much dept.

Crime 109

McGruber writes "Carl Fiorentino, known to many slashdotters for his regular hyperbole-filled emails advertising 'unbelievable' blowout pricing on memory, storage, other components, and overclocker specials, has been indicted in New York federal court on seven counts of fraud and money laundering charges. Fiorentino allegedly took more than $7 million in bribes and kickbacks in exchange for steering more than $230 million in business to the Taiwanese and California companies that made the payments."

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Fiorentino? (-1)

Anonymous Coward | about a year ago | (#44060205)

You gotta be kidding me. Let the guy go. This is a joke.

Re:Fiorentino? (1)

trum4n (982031) | about a year ago | (#44060619)

i know! i freakin loved him! I sure love his company. maybe newegg is in on this?

Re:Fiorentino? (0)

Anonymous Coward | about a year ago | (#44060663)

You gotta be kidding me. Let the guy go. This is a joke.

I realize that you're probably astroturfing for TD or just a troll, but please explain to me why kickbacks are a joke and why the Feds should, as you say, "let him go?"

Re:Fiorentino? (0)

Anonymous Coward | about a year ago | (#44061029)

oh that's easy. no regulation ever. CEOs should be a protect class.. etc.. etc..

in other words, corporate sycophantism.

Re:Fiorentino? (1)

RenderSeven (938535) | about a year ago | (#44061199)

$7 million in bribes and kickbacks in exchange for steering [sales] to the companies

Isnt that called "advertising"?

Re:advertising (1)

drainbramage (588291) | about a year ago | (#44062693)

That's what I was thinking:
Dude gets paid for selling lots of stuff, news at eleven.
People who didn't sell stuff are angry because he got lots of money.
Deep thinkers say send rich dude to prison and complain about the common thief not getting a fair break.
---
Whatever.
(Not letting my not reading the article get in the way of forming an opinion)

Throw the Book (3)

mfh (56) | about a year ago | (#44060217)

Just throw the book at this guy. He's scum. This is precisely what's wrong with the corporations on our planet and there has to be some kind of accountability, not that it would do much good in convincing CEOs to play a fair game. It seems everyone is cutting corners these days.

That is NOT how you grow a brand.

Re:Throw the Book (5, Insightful)

Anonymous Coward | about a year ago | (#44060369)

You're kidding right? Don't you know that every Fab manager in Asia does extra runs of chips under that table and sells them on the gray/black markets? Even large companies like Qualcomm know this, and they look the other way because they want the cheap chip production.

Every public company is operating against the interests of their common employees, and FOR the interests of their upper management / board of directors (and indirectly the stockholder). Know this and you will be less confused as your buying power is slowly eroded to nil.

Re:Throw the Book (1)

Anonymous Coward | about a year ago | (#44060807)

You're kidding right? Don't you know that every Fab manager in Asia does extra runs of chips under that table and sells them on the gray/black markets? Even large companies like Qualcomm know this, and they look the other way because they want the cheap chip production.

Every public company is operating against the interests of their common employees, and FOR the interests of their upper management / board of directors (and indirectly the stockholder). Know this and you will be less confused as your buying power is slowly eroded to nil.

Sigh. From TFA:

He allegedly used the kickbacks to buy an $8 million residence in Coral Gables, Fla., furnishings for the home and pay his credit card bills, as well as pay for tennis coaching and the use of a hip-hop production company. “Fiorentino had it all — a lucrative job and a high-flying lifestyle,” said Loretta E. Lynch, U.S. attorney for the Eastern District of New York, in a statement. “But his loyalties were neither to his employer nor its public shareholders but solely to himself,” she said.

Re:Throw the Book (2)

tompaulco (629533) | about a year ago | (#44061287)

Sigh. From TFA:

He allegedly used the kickbacks to buy an $8 million residence in Coral Gables, Fla., furnishings for the home and pay his credit card bills, as well as pay for tennis coaching and the use of a hip-hop production company. “Fiorentino had it all — a lucrative job and a high-flying lifestyle,” said Loretta E. Lynch, U.S. attorney for the Eastern District of New York, in a statement. “But his loyalties were neither to his employer nor its public shareholders but solely to himself,” she said.

Yes, and everybody that has an American Express Corporate card uses their reward points only for business related activities, and when they visit a client and are offered lunch always politely refuses. Kickbacks exist from the janitor to the CEO. Either it's all okay or it's all bad.

Re:Throw the Book (3, Insightful)

Anonymous Coward | about a year ago | (#44062253)

Either it's all okay or it's all bad.

There is plenty of middle ground. Some places realize that some kinds of meetings will span meal times and that meals are included in some functions, so allow meals to be covered, with some cap on price, others allow small gifts up to a certain value to help with allowing samples and simple tools to be given. Others can allow more, but require things to be declared, so that if there is a problem it gets stopped right away and the interference is more clear. As long as things are open and known, it is a little easier to just apply some common sense instead of needing to go an all or nothing approach.

Re:Throw the Book (1)

DragonTHC (208439) | about a year ago | (#44061515)

how is anyone surprised that the Type A personality was selfish?

Re:Throw the Book (0)

Anonymous Coward | about a year ago | (#44061989)

“But his loyalties were neither to his employer nor its public shareholders but solely to himself,” she said.

How is this different from every other CEO who lays waste to a companies foundation to meet some temporary metric in his contract that will give him a big bonus + golden parachute?

Re:Throw the Book (0)

MickyTheIdiot (1032226) | about a year ago | (#44061035)

There is NOTHING that will convince me at this point in the game that corporations are run for stockholders in *any* way, directly or indirectly.

Re:Throw the Book (0)

Anonymous Coward | about a year ago | (#44065201)

>Every public company is operating against the interests of their common employees, and FOR the interests of their upper management / board of directors

Couldn't have said it better myself. The majority of CEOs and directors (that are worshipped) are nothing but cancer. They outsource all technology to China, who in turn produce cheap knock-offs because of that outsourcing, which in turn, kills local industries. The CEOs make a huge profit (for themselves) and leave society in tatters.

This guy is no worse than your average CEO.

Re:Throw the Book (5, Funny)

dickplaus (2461402) | about a year ago | (#44060403)

Let me explain to you how this works: you see, the corporations finance Team America, and then Team America goes out... and the corporations sit there in their... in their corporation buildings, and... and, and see, they're all corporation-y... and they make money.

Re:Throw the Book (1)

cellurl (906920) | about a year ago | (#44061311)

Dell did the same thing. Siemens did the same thing. What do you propose?

Re:Throw the Book (1)

stenvar (2789879) | about a year ago | (#44061809)

This isn't about TigerMax doing anything; it's about an employee of TigerMax cheating his employer.

Re:Throw the Book (1)

Yakasha (42321) | about a year ago | (#44065157)

Just throw the book at this guy. He's scum. This is precisely what's wrong with the corporations on our planet and there has to be some kind of accountability, not that it would do much good in convincing CEOs to play a fair game. It seems everyone is cutting corners these days.

That is NOT how you grow a brand.

Don't be so quick to judge. You don't know the details of the case. I'm willing to bet you don't even know which Federal statues were allegedly violated. All you have are prosecutor's comments.

The feds have a 96% conviction rate in these types of cases. 90% of all their convictions are via plea deal. This is not because they are so good at finding criminals, but because many of the laws allegedly violated by these "scum" are so vague and wide-ranging that they are impossible to defend. Of the non-plea deal cases, many are thrown out by the time they get to appeal due to the vagueness of the laws, or improper jury instructions given by judges that misinterpret the laws.

I encourage you to read Three Felonies a Day to get an idea of what the other side of the coin looks like.

so (4, Interesting)

WGFCrafty (1062506) | about a year ago | (#44060235)

So he laundered 7 million in kickbacks from steering $240 million in business, not a $240 million dollar money laundering scheme. Too bad he's not HSBC, the only government authorized money launderer.

Re:so (1)

fustakrakich (1673220) | about a year ago | (#44060657)

I didn't know HSBC was part of the Fed... Oh wait, which government are we talking about?

Re:so (1)

bill_mcgonigle (4333) | about a year ago | (#44062015)

Oh wait, which government are we talking about?

Let me issue and control a nation's money and I care not who writes the laws. - Mayer Amschel Rothschild

Re:so (0)

Anonymous Coward | about a year ago | (#44060745)

Just call him Wile E. Cayote... (1)

Anonymous Coward | about a year ago | (#44060331)

Super Genius-- gets $7mm in kickbacks, buys $8mm house... hmmm..... give me $7mm and I'm set for life, dammit.

Not surprising (2)

sl4shd0rk (755837) | about a year ago | (#44060349)

Pretty much the norm these days, and not just in the US but everywhere. People in places of unbalanced power breaching the law. He will not do the kind of "time", as you or I, if found guilty.

Re:Not surprising (2)

Connie_Lingus (317691) | about a year ago | (#44060463)

yeah,,,i was in vegas recently and a homeless-looking guy was just pulling a 6-pack out of the cooler when a store employee grabbed him and called the cops. he hadnt even left the store yet. i actually walked over and offered to buy the beer for the guy just dont get him arrested. they would not let me 5 minutes later the cops come and arrest the guy...for what i still have no idea.

the point? that guy will probably do more time in jail then Carl will...oh yeah American justice sure.

Re:Not surprising (2, Interesting)

ScentCone (795499) | about a year ago | (#44060647)

for what i still have no idea

Exactly, you have no idea. Here's the likely explanation: trespassing. The store is private property, and the guy has probably been told to stay out because of earlier incidents. If you've been formally told you're not allowed in the store, and come in anyway, that's trespass. And it is a crime, and you get arrested for it. And no, it's probably not going to mean jail time unless you are a real ass and just keep doing it over and over again.

Which has nothing to do with money laundering and the way it's prosecuted.

Re:Not surprising (2, Insightful)

Like2Byte (542992) | about a year ago | (#44060853)

for what i still have no idea

Exactly, you have no idea. Here's the likely explanation: trespassing. ...

You're adding more conjecture to his conjucture? Interesting.

Re:Not surprising (1)

ScentCone (795499) | about a year ago | (#44061653)

You're adding more conjecture to his conjucture? Interesting.

No, I'm pointing out a common reason for exactly what he witnessed, as opposed to his vague handwaving and comparing of two utterly unrelated things.

Re:Not surprising (0)

Anonymous Coward | about a year ago | (#44062579)

A company can ask a person to leave, and it is their choice. A company can tell a person to leave, and if they do not, then police can be brought in to the matter. It does not sound like this man was told to leave, or even asked. Quite unfair to the guy, but I hope he got better conditions in prison than without.

Sad what the money spent to keep people in prison unnecessarily could do to those that could use support the most.

Re:Not surprising (2)

ScentCone (795499) | about a year ago | (#44064449)

Quite unfair to the guy

Unless, as is very often in the case in retail settings - especially where packaged alchohol is sold, he'd been previously told that he wasn't allowed on the premises. That scenario makes subsequent arrival in the store trespass, immediately.

Let's say there's someone who comes to your front door and does stuff you don't like, on your property. You tell them to leave, and that the next time they set foot on your property, they'll be trespassing. If he shows up again, you can call the police and tell them exactly what's going on, and they can arrest. Especially (as is frequently the case with the sort of guy described, in the sort of business described) when the cops - by virtue of having to deal with the same people on a regular basis - already know the person in question isn't allowed to trespass.

Re:Not surprising (2)

Connie_Lingus (317691) | about a year ago | (#44063813)

unrelated? really i was commenting on the post where the person said CF will probably not do any time in prison...my comment had to do with the way America's legal system is constructed nowadays where two men can both commit crimes, one for basically zero dollar damage and one for millions, yet the jail industrial complex will make the zero dollar one actually suffer in jail.

btw obviously i agree with the poster...CF will hire super lawyers and skip and thru the process...the homeless looking guy wont.

Re:Not surprising (1)

Anonymous Coward | about a year ago | (#44062281)

A possible counterexample is not necessarily proof that the counterexample is how it happened, but it is pretty solid suggestion that the original interpretation isn't certain.

Explain the diff between sales commissions and ... (0)

Anonymous Coward | about a year ago | (#44061151)

taking a bribe to "steer" business to one vendor rather than another?

The guy who steers me to buy Ford trucks every few years gets a commission on his sales to me, so why is it money laundering for this guy to select companies to buy from based upon their business relationship?

Just askin'

Re:Explain the diff between sales commissions and (2)

bws111 (1216812) | about a year ago | (#44061243)

On the off chance you are not just trolling...

The guy who sells you trucks works for a Ford dealer. The dealer pays him commission for selling their product. Nothing shady about that. He is acting in the best interest of his employer when he sells you a Ford truck.

This guy was not acting in the best interest of his employer. Rather than make supplier decisions based on the companies criteria, he was making them based on who paid him the most bribes. Even if you look at the kickbacks as some sort of volume rebate, that money should go to the company, not the employee. His keeping the money (and hiding it from his employer) is fraud. The money laundering is what he did to hide the money obtained by the fraud.

Re:Explain the diff between sales commissions and (1)

somersault (912633) | about a year ago | (#44061285)

Yeah, I thought that was exactly what advertising/sales do.

maybe their prices will FINALLY come down then (2, Informative)

slashmydots (2189826) | about a year ago | (#44060357)

I'm so sick of TD always being 1-5% more expensive than Newegg when they ship almost everything from 1 state away in 1 day for ground charges and newegg ships from 3 locations that all take 4+ days to get to my state. I have a residential and business account at both and always wondered why, even at my volume for my business, TD just can't seem to get their crap together and lower their prices. They buy from the same places as Newegg! Well, this explains it. Hopefully now this asshole's replacement will pick from the cheapest supplier instead of one bribing him and lower TD's prices to compete with Newegg.

Re:maybe their prices will FINALLY come down then (0)

Anonymous Coward | about a year ago | (#44060405)

I have never actually managed to buy from TD. Not for a lack of trying. "out of stock" every time (about 10 times now). This is going back to the mid 90s when they were a huge advertiser in computer shopper too. I pretty much gave up trying to buy from them.

I swear either they do not actually stock anything or I am extremely unlucky.

Re:maybe their prices will FINALLY come down then (1, Interesting)

slashmydots (2189826) | about a year ago | (#44060523)

I have a dedicated rep that I talk to whenever I need to make an order (business account feature only). She tells me if it is actually in stock, how many, which warehouse, and real shipping times. Also, she informed me that if the item number starts with YY that means that it's being drop-shipped from a completely different company that's a "partner" with them and it could take many more days or run into strange backorder problems.

I have noticed that a lot of items are held in relatively low stock at their own warehouses. Like one time I asked how many of a common Pentium G-series CPU there were and there like like 30. I would have thought 1000 at their sales volume level. She seemed to think that they purposely ride it pretty tight because their vendors can renew their inventory very quickly and also to prevent part depreciation from holding it too long in between purchases.

Re:maybe their prices will FINALLY come down then (1)

BForrester (946915) | about a year ago | (#44060517)

I've also found the prices, with shipping, to be less than competitive. However, I also live 5 minutes away from a TD retail location, and their prices -- when shipping isn't part of the equation -- are consistently 10-15% cheaper than any other option in my region, whether online or brick and mortar.

Re:maybe their prices will FINALLY come down then (2)

tocsy (2489832) | about a year ago | (#44060595)

So you're saying that you're sick of TigerDirect shipping more quickly than Newegg for slightly more money? It sounds to me like they're offering something that their competition isn't, and they're charging a little more for it.

I don't care either way - I switch between them both depending on who's cheaper for the component I'm buying - and I HAVE gotten stuff cheaper on TigerDirect than Newegg.

Re:maybe their prices will FINALLY come down then (0)

Anonymous Coward | about a year ago | (#44060639)

Same here, I actually just got a laptop shipped for around $35.00 less than newegg listed it before shipping, ordered on a thursday, it arrived on Monday....

Re:maybe their prices will FINALLY come down then (0)

Anonymous Coward | about a year ago | (#44060695)

So you're saying that you're sick of TigerDirect shipping more quickly than Newegg for slightly more money?

So I'm not the only one confused by his post. He almost makes it sound like he expects faster shipping to cost less.

Re:maybe their prices will FINALLY come down then (0)

slashmydots (2189826) | about a year ago | (#44061637)

They both cost about the same, they both use UPS ground 3-5 shipping, just Illinois to Wisconsin is always a 1 day trip and California/Tennessee/New Jersey (Newegg's main 3) are 3 days minimum. It's just coincidence that I live closers so to just me specifically, TD is faster. If you lived in California, Newegg would be potentially faster, assuming you didn't order a part that resides solely in their New Jersey warehouse.

Re:maybe their prices will FINALLY come down then (1)

Joe_Dragon (2206452) | about a year ago | (#44061807)

you can pick up from the store that is part of the warehouse in Naperville il

Re:maybe their prices will FINALLY come down then (0)

Anonymous Coward | about a year ago | (#44061169)

Nice... Me too, and that's even with state taxes either way because their warehouse is in Chicago. Not that I mind going to their Vernon Hills outlet which is the closest one to where I live because it's better than most other stores when it comes to computer stuff, but it's a half hour drive so buying online is still more convenient.

But yeah TD, stop charging marginally more for being convenient with low shipping times, good customer service, and stuff!

Re:maybe their prices will FINALLY come down then (1)

Joe_Dragon (2206452) | about a year ago | (#44061827)

Go to Naperville but IL 59 sucks at least it will be 3 lanes each way soon.

There are alternatives (1)

ub3r n3u7r4l1st (1388939) | about a year ago | (#44062515)

Interstate 355 is a major one, otherwise County Farm rd. / Naper Blvd, or IL-25 is also a good option. I live near Winfield use Naper Blvd to get to H-mart for hippie food & stuff.

Re:There are alternatives (1)

Joe_Dragon (2206452) | about a year ago | (#44063729)

Winfield is nice shortcut to get on I-88. When I went to pick stuff up at tiger I hated the IL-59 slow downs.

Re:There are alternatives (1)

ub3r n3u7r4l1st (1388939) | about a year ago | (#44065379)

If you live near that area then IMHO obviously Fry's Electronics (at finley + butterfield ) is a much better choice.

Re:maybe their prices will FINALLY come down then (1)

slashmydots (2189826) | about a year ago | (#44061609)

I just coincidentally live closer to their primary warehouse in Illinois while Newegg is on each coast and that's it. TD didn't locate close to me on purpose, lol.

Re:maybe their prices will FINALLY come down then (0, Funny)

Anonymous Coward | about a year ago | (#44060821)

You are getting more value at a higher cost, and wondering why? Please end your oxygen deprived life.

If what the OP said is true (-1, Flamebait)

ub3r n3u7r4l1st (1388939) | about a year ago | (#44061007)

Ugly American entitlement attitude of the Obama generation showing its head.

Re:If what the OP said is true (0)

Anonymous Coward | about a year ago | (#44061097)

Are you serious? WOW.

What, were you born on January 20, 2009? You must not have seen the entitlement of the "Bush Generation".

Re:maybe their prices will FINALLY come down then (-1, Troll)

slashmydots (2189826) | about a year ago | (#44061643)

You fucking moron. Read a reply above: They both cost about the same, they both use UPS ground 3-5 shipping, just Illinois to Wisconsin is always a 1 day trip and California/Tennessee/New Jersey (Newegg's main 3) are 3 days minimum. It's just coincidence that I live closers so to just me specifically, TD is faster. How fucking stupid are you? Keep hiding behind your stupid anonymous post, troll.

Re:maybe their prices will FINALLY come down then (1)

gl4ss (559668) | about a year ago | (#44060845)

that doesn't really explain it. he just laundered a a part of his profit margin, it's just tax evasion(if anything it was why their prices were comparable).

what explains is this: they got faster shipping so they still get your business even if they're not the cheapest.

Re:maybe their prices will FINALLY come down then (0)

slashmydots (2189826) | about a year ago | (#44061695)

They actually got 1/5th of my purchases and newegg got 4/5 this year thus far. The only reason they're faster is because they're 1 state away. They don't actually ship any faster than Newegg. I run a retail shop that does computer repair and custom builds so it's nice to get orders in 1 day but if it costs $510 instead of $500 to build a PC because I got the parts at TD, my customers will go elsewhere. The margins on computers and computer accessories suck so I usually go to Newegg to make the most money even if it's slower.

By the way, if you get a TD business account and promise to (and then actually do) spend $15,000 total in one year, they'll give you a bronze level discount from the get-go which is 5% off everything, no exemptions, no limits. Newegg's business side is a complete joke with practically zero advantage over residential. In fact, it has about 1/10th the amount of awesome limited time sales. They offer no discounts whatsoever on almost all of the items just because it's a business account and all the alleged bulk discounts are available in the residential side as well.

Re:maybe their prices will FINALLY come down then (0)

Anonymous Coward | about a year ago | (#44061853)

check out microcenter, they are often even (significantly) cheaper than newegg esp on motherboards and processors

Re:maybe their prices will FINALLY come down then (1)

ganjadude (952775) | about a year ago | (#44063387)

really? I always compare newegg and TD (and simetimes check outpricewatch) and for my items anyway TD tends to be cheaper 9 times out of 10

Was I the only one? (5, Interesting)

TWiTfan (2887093) | about a year ago | (#44060363)

Was I the only one who always always found TigerDirect to be kind of sleazy? I mean, even back *years* ago, they always reminded me of those skeevy camera stores that are notorious for false advertising and bait-and-switch deals.

Re:Was I the only one? (2)

freeze128 (544774) | about a year ago | (#44060563)

No, I also thought it was suspicious. They were always advertising on TV. I have never seen a NewEgg TV commercial. It's rare that companies in this industry advertise on television. Usually, they go where the market is: The internet, or trade magazines. If you advertise on TV, then you start to get Mr Joe Everyday ordering computers and components, and he doesn't know anything about it. My dad would always show me ads from TigerDirect and ask me if I thought it was a good deal. Now, I know why....

Re:Was I the only one? (0)

Anonymous Coward | about a year ago | (#44060801)

There have been NewEgg TV commercials. I don't know if they are still running, because I almost completely stopped watching TV, but I remember them better than I do any Tiger Direct commercials I have seen.

Re:Was I the only one? (1)

Elbereth (58257) | about a year ago | (#44060913)

Ever since the early days, there has been a loud minority of people proclaiming that Tiger Direct is run by scammers. This reputation has kept me from ever buying anything from them. If these allegations are true, then maybe Tiger Direct does deserve that reputation.

Re:Was I the only one? (1)

bws111 (1216812) | about a year ago | (#44061263)

These allegations have nothing to do with the company, it's customers, or any scam against it's customers. It is about an employee of the company who defrauded the company.

Re:Was I the only one? (2, Informative)

Anonymous Coward | about a year ago | (#44061353)

It's true. They don't even sell tigers.

Re:Was I the only one? (1)

ArhcAngel (247594) | about a year ago | (#44061255)

As a long time patron of Tiger Direct I understand what you are referring to regarding their marketing but I have never had anything but excellent experiences with their web store. ( The more recent retail outlets are a different matter.) I have had a few defective parts over the years and I HATE dealing with returns but TD always made it as painless as possible for me and never questioned the return. I'd say all of the systems I have built have included at least one part sourced through them. It doesn't speak to Fiorentino's actions but more to the company overall. Their rebate scandal [bizjournals.com] a few years back was unfortunate (I don't know any company who's rebate program isn't designed to make it hard to redeem) but I will continue to do business with them as long as they continue to be a good source. That doesn't mean I don't check Newegg and Monoprice before I proceed to checkout.

Re:Was I the only one? (0)

Anonymous Coward | about a year ago | (#44061671)

They have some retail shops close to where I live though they have since renamed them to use the CompUSA brand. I've had a few experiences with the place that has left me careful when shopping there.

The worst was while waiting for them to get me something from the back one day, I over heard one of the employees answer the telephone and explain to the customer that yes they had a part in stock, it was one of the parts listed in there sale flyer, can't remember which it was. I thought it was strange since I had looked for the same item earlier with no luck. Then the employee turns to another employee tells him that someone is driving 1 hour to get to the store for the part, and that they don't have any in stock and to up-sell him when he gets there.

They also used to advertise a bunch of rebates, sometimes multiple ones for same item. A friend of mine bought a slightly more expensive compute case there that had both a store and manufacture rebate listed in the advertisements, making it advertised as cheaper than the one she originally wanted. But once she got it home and started doing the paperwork it came out that both wanted the same cut out part of the box to honor the rebate so it was impossible to get both, even though the store listed the price with both rebates applied.

I still shop there occasionally as they will carry stuff that is harder to find except through mail order, and they seem to have gotten a little better with the switch to the CompUSA branding. But always double check to make sure I got exactly what I paid for.

Re:Was I the only one? (1)

avandesande (143899) | about a year ago | (#44063425)

Was this back when Microsoft was getting sued for including a browser with their operating system?

Re:Was I the only one? (0)

Anonymous Coward | about a year ago | (#44061925)

I thought them sleazy as well. Up until Hurricane Andrew. The hurricane hit their business very hard. They were unable to conduct business for weeks. They let their customers know what was going on and that they were working to be able to reopen. Many businesses in the area never did reopen. I get the idea that the employees and management pulled together and somehow overcame the destruction. Eventually, they reopened and continued to grow. After that, I always thought of them a little differently.

Re:Was I the only one? (1)

Tsiangkun (746511) | about a year ago | (#44062525)

I never ordered from TigerDirect. The prices were good. Too good. I was always concerned I was missing something and would get genuine Kingsten memory, or a sweet Inntel Processor.

mE TOO (0)

Anonymous Coward | about a year ago | (#44063345)

TD scammed me with some type of charge fraud through an associated entity that added discreet unauthorized charges and couldn't be cancelled or contacted directly. I knew something smelled bad...
But since it was only a couple of 10 dollar charges I didn't bother pursuing. I suspect it was laundering and wire fraud and credit fraud,

They're semi-sleazy (1)

Radical Moderate (563286) | about a year ago | (#44064069)

I haven't ordered from them in a while, but their "great prices" often depended on rebates that had strict qualifications. i'd rather deal with New Egg, but sometimes TD is worth taking a chance. I don't think I ever had a problem with anything I got from them, besides collecting the rebate.

Re:Was I the only one? (2)

FrothyBitter (848137) | about a year ago | (#44065123)

Nope, I always thought of them as extremely sleazy despite having zero corroboration. My brother buys from them all the time, the stuff comes in a very timely fashion and exactly as represented. One time, about 5 years ago, I even broke down and ordered a 500 watt modular power supply with 2 lighted fans and a bluish chrome finish for 20 bucks. I was sure there was a catch to this deal. Absolutely positive. A couple days later the power supply came, and it was super nice quality. It came with so many modular cords that I didn't even use half of them, and the cords were super nice quality as well: wires wrapped in a tube of cross stitch metal shielding, sealed in a colored translucent rubber tube. Bottom line, I got a power supply that would have cost over twice as much on sale anywhere else, that has been running nearly 24/7 for over 5 years now.

I never ordered anything from them again, because for some reason I just could never shake the shady feeling I get from them.

CEO (1)

Jaysyn (203771) | about a year ago | (#44060373)

He'll never see the inside of a prison for his crimes.

Got busted, eh? (1)

Rod Beauvex (832040) | about a year ago | (#44060397)

Someone didn't get paaiid!

Used to be a SYX shareholder (2)

Paddy_O'Furniture (2652321) | about a year ago | (#44060401)

I have been purchasing from TD for years and was so pleased with them that I bought shares in SYX. This was before Carl starting showing his ugly mug in some of the advertising. My first reaction to seeing him in the ads was "sleazeball". I hope Carl burns but that TD doesn't suffer by association.

mod 0P (-1)

Anonymous Coward | about a year ago | (#44060461)

you down. It was Contaminate3 while

Tigerdirect is the victim here (1)

Spy Handler (822350) | about a year ago | (#44060471)

and the consumer to some extent... but of course the consumer could always just buy from Newegg.

Similar case involving Frys: company executive steers business to certain vendors in exchange for kickbacks [fugitive.com]

Re:Tigerdirect is the victim here (1)

cdrudge (68377) | about a year ago | (#44060593)

I find the picture in that article funny due to his frown, and the ad right below it to get the "smile you always dreamed of".

Re:Tigerdirect is the victim here (1)

LehiNephi (695428) | about a year ago | (#44060851)

What was odd about the Fry's case was that many of the companies that got that business were actually lower-cost suppliers, like ECS. Right after that case broke, Frys stopped doing the really good CPU/Motherboard deals. So customers actually ended up worse off when they caught the guy.

They should also jail (1)

phorm (591458) | about a year ago | (#44060483)

Whoever it is that makes those awful "Black Friday in April", "May Black Friday" etc etc ads.
I don't mind being notified about stuff on sale, but there is only one Black Friday, it's a specific event, and all the other idiotic ads just insult the intelligence of anyone who receives the emails (that, and the sales tend to suck).

Re:They should also jail (1)

west (39918) | about a year ago | (#44060885)

there is only one Black Friday

Heh. "Black Friday" is a piece of marketing fluff that accidentally happened to catch on. Trying to lend it gravitas beyond that is just silly.

Re:They should also jail (1)

Karzz1 (306015) | about a year ago | (#44061943)

undoing accidental mod -- f'n slashdot, pick a mod method already!!!

This seems small (0)

Anonymous Coward | about a year ago | (#44060487)

Some sales people make 10% commission... they''re thinking of him wrong.. he's a poorly paid sales person... there.. fixed it.. not illegal.

In case you're wondering... (5, Informative)

slashmydots (2189826) | about a year ago | (#44060575)

They own: Tiger Direct, Tiger Direct B2B, Systemax, Infotel Distributors, Ultra, Global Industrial, Nexel, Misco, Speedgifter, WorldWide Rebates, Comp USA, and believe it or not, Circuit City.

Re:In case you're wondering... (1)

Gothmolly (148874) | about a year ago | (#44060813)

Ah yes, the illusion of choice. It was found that over 99% of the subjects would accept it, provided that they thought they had a choice.

Like the US Governmental system.

OT: My LAST experience w/ TigerDirect (2)

GodfatherofSoul (174979) | about a year ago | (#44060713)

I was looking for a RAID enclosure for my little VM setup. What I got was a hard drive array (basically a port extender) with a RAID card thrown in. I went back to look at the advertisement to see how I got it wrong, and the ad used very deceptive wording about "additional items" included. Very shady and one of those transactions that evaporates any trust you might have in a vendor.

Re:OT: My LAST experience w/ TigerDirect (1)

tibman (623933) | about a year ago | (#44060961)

1 star that thing so nobody falls into it after you.

Not MOney Laundering (1)

jekewa (751500) | about a year ago | (#44060891)

I'm no lawyer, and never played one on TV, but that doesn't sound like money laundering, but rather payola [thefreedictionary.com] .

If I RTFA correctly, he received money from companies in exchange for steering business to them. Kind of like a beer company giving a bar a neon light or posters or other discount in exchange for trying to get their customers to buy that brand of beer...

Money laundering would be taking illegally gained funds and turning them into legal appearing funds by funneling them through (seemingly) legitimate business. There's probably that, too, as I'm sure at some time some drug dealer or pickpocket or other hooligan bought a crappy MP3 player from tigerdirect.com at some time...

Re:Not MOney Laundering (0)

Anonymous Coward | about a year ago | (#44061059)

That would be the part where he funneled the money through all those shell companies...

Re:Not MOney Laundering (1)

swb (14022) | about a year ago | (#44061309)

It's completely clear why this "steering" is illegal. I thought that's largely what sales WAS -- steering to company A over company B for reasons beyond simple differences in product quality or cost.

I have to believe that this goes on all the time, everywhere. I used to get free lunches and unsolicited trinkets from vendors all the time. I never changed my buying habits based on this, but maybe for $7 million I might.

I get why steering is undesirable from an economic perspective -- it's a huge economic inefficiency, but then again, so is paying your CEO a billion dollars when the company loses money. I also get why businesses would fire you if they found you doing it, but then again, they might fire you for not showing up to work, yet that isn't a crime, either.

About the only argument that makes sense is that it is "stealing" indirectly, but this would seem to depend on the product being purchased at meaningfully inflated prices versus simply from the lowest cost vendor. Even when products are identical, it often makes sense to choose a higher priced supplier for service or other reasons.

At some point, while I agree it is shady and not an ideal practice, it kind of seems like it's illegal because business management doesn't like it or get a piece of it, not because it represents material harm.

Re:Not MOney Laundering (1)

swb (14022) | about a year ago | (#44061349)

Oops, that should read "It's NOT completely clear..."

Re:Not MOney Laundering (1)

bws111 (1216812) | about a year ago | (#44061399)

Of course there is harm. If a vendor is willing to offer rebates because of volume (nothing illegal about that), then that rebate money belongs to the company. The employee keeping the money (and not informing the company) is fraud.

Re:Not MOney Laundering (1)

IndustrialComplex (975015) | about a year ago | (#44061905)

At some point, while I agree it is shady and not an ideal practice, it kind of seems like it's illegal because business management doesn't like it or get a piece of it, not because it represents material harm.

The reason it is illegal is fiduciary responsibilty. What it boils down to is this: The people who own the company have hired this person to make business decisions which will maximize the profit (or maximize whatever specific metric was defined as his responsibility). When someone with a fiduciary responsibility takes a bribe, they are basically conspiring with the bribing entity to steal a money from the shareholders/business owner and taking a cut of that stolen money in the form of the bribe.

ie: You give me $100 and tell me to go get the best value widget on the market. I determine that widgets should cost $50. Company A offers the widget for $50 and Company B offers the widget for $80.

Company B offers a bribe of $20 dollars if I choose their $80 widget. This provides for $10 pure profit for company B over the base widget value, and $20 for me by accepting.

However, that $30 difference was $30 that was effectively stolen from you when the decision was made to not select the appropriately priced $50 widget.

The value of the bribe, plus the cost difference between comparable products is pure theft from the people whose money the bribe receiver was entrusted to manage.

That's why it is illegal, and unethical.

Re:Not MOney Laundering (1)

swb (14022) | about a year ago | (#44063999)

The assumption here is that the bribe is always paid by a company offering substantially above-market pricing for commodity products and that the price differential between fair market prices and bribery prices pays the bribe.

I would argue that this form of kickbacks is much less common and less likely to happen. There almost always is intense scrutiny of costs and substantive overpricing will almost always be noticed, especially on recurring products.

I think kickbacks are probably more common in situations where pricing is opaque (complex and one-time transactions) and where pricing is relatively equal and the value to the kickback payer isn't in the increased margin but in the increased volume or market share.

In the situation where pricing is equal, it's hard to see where the crime is because the company doing the purchasing has nothing to gain or lose switching between vendors.

Re:Not MOney Laundering (0)

Anonymous Coward | about a year ago | (#44061953)

He money-laundered the kickbacks. That is, he concealed the path by which people paid him the kickbacks. It's questionable whether this should be a separate offense, but that's apparently the new legal system for you.

Gilbert? (0)

Anonymous Coward | about a year ago | (#44061479)

I see no mention of Gilbert Fiorentino in all this. I wonder what all this means for him - as he was probably around during all of this.

Re:Gilbert? (0)

Anonymous Coward | about a year ago | (#44064261)

I see no mention of Gilbert Fiorentino in all this. I wonder what all this means for him - as he was probably around during all of this.

Here is a September 12, 2012 press release posted on the US Securities & Exchange Commission's website: http://www.sec.gov/litigation/litreleases/2012/lr22481.htm [sec.gov]

U. S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 22481 / September 17, 2012 Auditing and Accounting Enforcement Release No. 3416 / September 17, 2012 SEC v. Gilbert Fiorentino, Civil Case No. 12-cv-23388, (S.D. FL.) (September 17, 2012) SEC CHARGES FORMER SYSTEMAX DIRECTOR IN COMPENSATION SCHEME On September 17, 2012, the Securities and Exchange Commission (“Commission”) filed a civil action for fraud and other violations against, and proposed settlement with, Gilbert Fiorentino, a former director of Systemax Inc. (“Systemax”), a Port Washington, N.Y.-based consumer electronics retailer. The Commission’s Complaint, filed in the U.S. District Court for the Southern District of Florida, alleges that Gilbert Fiorentino, who in addition to serving on the board was the former chief executive of Systemax’s Technology Products Group in Miami, obtained over $400,000 in extra compensation directly from firms that conducted business with Systemax. Fiorentino also stole several hundred thousand dollars worth of company merchandise that was used to market Systemax’s products online and in mail order catalogs. Because Fiorentino was one of Systemax’s highest-paid executives, the federal securities laws required the company to disclose all compensation he received each fiscal year as well as his perks and other personal benefits. Since Fiorentino failed to disclose his extra compensation and perks to Systemax or its auditors, the amounts were not reported to shareholders correctly. Systemax placed Fiorentino on administrative leave in April 2011. After the SEC began investigating the conduct, Fiorentino agreed to resign from all of his positions with Systemax, surrender stock and stock options valued at approximately $9.1 million, and repay his 2010 annual bonus of $480,000. According to the SEC’s complaint, the misconduct occurred from January 2006 to December 2010. Systemax sells personal computers and other consumer electronics through its websites, retail stores, and direct mail catalogs. Fiorentino arranged the extra compensation as he dealt directly with external service providers, manufacturer representatives, and other entities that conducted business with Systemax. For example, he demanded and received $5,000 to $10,000 monthly from an entity that supplied materials to Systemax’s subsidiaries for use in retail and mail order operations. The SEC further alleges that through his executive position at Systemax, Fiorentino had access to company merchandise used to market Systemax products in mail order catalogs and online. Fiorentino routinely misappropriated some of this merchandise and failed to disclose it to Systemax and its auditors. According to the SEC’s complaint, as a result of Fiorentino’s actions, the information that Systemax filed with the SEC and provided to investors materially understated his compensation and omitted his personal financial interest in certain related-party transactions. Fiorentino reviewed and signed each Systemax Form 10-K from fiscal year 2006 to 2010 while knowing that it failed to make the required disclosures. Fiorentino also routinely signed management representation letters to Systemax’s independent auditors stating that he did not know of any fraud or suspected fraud involving Systemax’s management. The SEC’s complaint alleges that Fiorentino violated Sections 10(b), 13(b)(5), and 14(a) of the Securities Exchange Act of 1934 (“Exchange Act”) and Exchange Act Rules 10b-5, 13b2-1, 13b2-2, 14a-3, and 14a-9. In addition, the SEC’s complaint alleges that Fiorentino aided and abetted Systemax’s violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20 and 13a-1. Fiorentino has consented to the entry of an injunctive order without admitting or denying the allegations in the Commission’s complaint. The proposed order would: Enjoin Fiorentino from violating the anti-fraud, proxy, lying to accountants, and record-keeping provisions of the securities laws (Sections 10(b), 13(b)(5), and 14(a) of the Securities Exchange Act of 1934 and Rules 10b-5, 13b2-1, 13b2-2, 14a-3, and 14a-9). Enjoin Fiorentino from aiding and abetting violations of the reporting, record-keeping, and internal control provisions of the securities laws (Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934 and Rules 12b-20 and 13a-1). Order Fiorentino to pay a $65,000 civil penalty; and Permanently bar Fiorentino from serving as an officer or director of a public company. This settlement is subject to the approval of the U.S. District Court of Florida.

Same thing happened with Fry's back in '06 (1)

King_TJ (85913) | about a year ago | (#44061825)

http://www.mercurynews.com/ci_11290227 [mercurynews.com]

The Fry's CEO accepted all sorts of kickbacks to try to pay down his gambling debts. As I recall, he was only caught when an employee happened to find some incriminating paperwork he threw in a trashcan....

which Taiwanese company? (1)

Qwavel (733416) | about a year ago | (#44062619)

The article doesn't say. Is that info Public?

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