BOSTON - Today federal authorities charged a Brockton, Mass., man, a North Carolina man, and a Hanover, Mass., company in federal court for participating in schemes to sell high-tech equipment stolen from EMC Corporation, over the Internet. This investigation was conducted by the U.S. Immigration and Customs Enforcement (ICE) Office of Homeland Security Investigations (HSI).
Kevin Kelly, 33, of North Carolina, Mark Rothfuss, 47, of Brockton, Mass., and BL Trading, LLC, of Hanover, Mass., were charged in three related cases with wire fraud and selling, receiving, or transporting stolen property in interstate commerce. Kelly was also charged with aggravated identity theft.
The charges against Kelly allege that he worked in the North Carolina factory of EMC Corporation, a large manufacturer of computer equipment headquartered in Massachusetts. From 2000 through 2009, the charges allege that Kelly stole approximately $929,891 worth of equipment from the factory by concealing EMC equipment in a small duffle or gym bag as he left work. The charges also allege that Kelly sold the stolen equipment over the Internet using the identity of an associate without the associate's knowledge. The use of the Internet to fence stolen goods has come to be known as "e-fencing."
The charges against Rothfuss allege that he worked at EMC's service call centers in Newton and Waltham, Massachusetts. It is alleged that between 2007 through 2009, Rothfuss stole approximately $140,654 worth of EMC equipment in a number of ways, including by requesting more equipment for repairs than he actually needed.
The charges against BL Trading, LLC, allege that the Hanover, Mass., company bought most of Kelly's stolen equipment and that a former BL Trading employee who had primary responsibility for purchasing equipment for its resale business knew or was willfully blind to the fact that Kelly's equipment was stolen. The Information also alleges that BL Trading lawfully used software obtained from EMC to update EMC computer equipment that it was supposed to use only for its EMC-authorized business, but instead used it to update EMC computer equipment for its separate resale business.
If convicted on these charges, Kelly faces up to 32 years of imprisonment, to be followed by 3 years of supervised release, restitution and forfeiture; Rothfuss faces up to 30 years of imprisonment, to be followed by 3 years of supervised release, restitution and forfeiture.
Kelly and Rothfuss also face fines of up to $250,000 or twice the gain or loss, whichever is highest, per count. BL Trading faces restitution and a fine of $500,000 or twice the gain or loss, whichever is highest, per count.
In a deferred prosecution agreement with BL Trading, the United States agreed to dismiss the charges after two years if the company cooperates with law enforcement officials, pays restitution, and adheres to a strict corporate compliance program designed to ensure that it does not purchase or sell stolen equipment and does not update used equipment without the manufacturer's agreement.
This federal corporate compliance program is one of the first of its kind in the country for a computer reseller. "Congress and the public have become increasingly concerned with the ease by which people can unlawfully obtain items and sell them over the Internet under false or assumed identities," said U.S. Attorney for the District of Massachusetts Carmen M. Ortiz. "If accepted by the Court, the compliance program announced today will provide a model for online equipment resellers to ensure that their vendors are legitimate."
"This type of alleged illegal behavior robs legitimate businesses of millions of dollars in lost revenue," said Bruce M. Foucart, special agent in charge of ICE HSI in Boston. "HSI will continue to investigate these crimes in an effort to deter this activity in the United States and around the world."
The United States also filed separate plea agreements with Kelly and Rothfuss.
U.S. Attorney Ortiz and Special Agent in Charge Foucart made the announcement today. The case was investigated by ICE HSI with help from EMC. It is being prosecuted by Assistant U.S. Attorney Scott L. Garland of Ortiz's Computer Crimes Unit.
The details contained in the informations are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.