2001-09-24 -- Kleinman, Mark S. -- Indictment/Arrest -- News Release

Cherry Hill Businessman Indicted for Running Telemarketing Scams and Possession of Child Pornography

CAMDEN - The owner of a Cherry Hill-based telemarketing business was arrested today on a federal Indictment charging him with being the leader of a telemarketing scam that defrauded businesses of approximately $2 million and with possession of child pornography, U.S. Attorney Christopher J. Christie announced.

Count One through Count 14 of the 15-count Indictment against of Mark S. Kleinman, a/k/a Rick Green of Cherry Hill, describe two elaborate schemes to defraud hundreds of businesses throughout the country. Count 15 of the Indictment charges Kleinman possessed images of child pornography.

The Indictment was unsealed this morning with Kleinman's arrest at his home early this morning by U.S. Postal Inspectors. Kleinman is scheduled to make an initial appearance today at 2:00 p.m. before U.S. Magistrate Judge Ann Marie Donio.

The Indictment describes Kleinman, 46, as the leader of a telemarketing business that he operated through several companies he owned, which typically listed a post office box as its business address. The Indictment alleges that Kleinman, as the head of the telemarketing business, developed a sales practice that included targeting maintenance employees of companies throughout the United States and bribing them with gift certificates, money orders, and other items to persuade them to purchase products at grossly inflated prices.

Furthermore, the Indictment charges that maintenance employees who were corrupted by Kleinman caused victim companies to make payment on invoices for products that were never shipped by Kleinman's business.

The Indictment alleges that from March 1994 to February 2001, Kleinman conspired with William Martin Dunlap, Ricky Ward - employees of certain of the victim companies - and others to carry-out the fraudulent scheme of making businesses pay fraudulent and inflated invoices issued by the telemarketing business. The Indictment alleges that Kleinman paid the corrupt employees kickback or bribe payments equal to approximately 10 percent of the invoice amount, which the victim companies paid to Kleinman's telemarketing business.

For example, the Indictment states that Dunlap, 58, of Schaumburg, Ill., received bribe payments totaling at least $100,000 in getting his former employer, Bell & Howell Company of Chicago, to make payment of fraudulent and inflated invoices totaling more than $1 million. Ward, 46, of Columbia, S.C., similarly received approximately $30,000 in kickback payments from Kleinman for his role in causing his former employer, Palmetto Richland Memorial Hospital of Columbia, S.C., to make payment of fraudulent and inflated invoices totaling $337,378.

The Indictment alleges that Kleinman devised a separate fraudulent scheme in which he sent small packages of plastic gloves, costing approximately 33 cents, to numerous hospitals that had not ordered the product. The Indictment states that Kleinman then submitted invoices for the gloves to the hospitals charging approximately $80 for the small packages. If the hospital did not pay the invoice, Kleinman then sent "past due" notices to the hospitals to get the invoices paid, according to the Indictment.

The Indictment further alleges that Kleinman illegally possessed child pornography on two computers. Law enforcement officials seized the computers during the execution of a search warrant in connection with the investigation into the telemarketing scheme, and later determined that the computers had files containing images of child pornography on them.

Count One of the Indictment charges Kleinman with being a member of a conspiracy to commit mail fraud to perpetrate the telemarketing scam. Counts Two through Fourteen charge Kleinman with individual instances of mail fraud stemming from the mailing of fraudulent invoices to victims, causing checks to be remitted to his telemarketing business, or mailing bribe payments to the employees he corrupted. Count Fifteen charges that Kleinman illegally possessed child pornography on two computers.

The Indictment is available by contacting the U.S. Attorney's Office Public Affairs Office at either 856-757-5233 or 973-645-2888.

The conspiracy count and each of the mail fraud counts carries a maximum penalty of five years in prison and a $250,000 fine. The possession of child pornography count carries a maximum penalty of 15 years in prison and a $250,000 fine.

Under U.S. Sentencing Guidelines, U.S. District Judge Joseph E. Irenas would, upon conviction, determine the actual sentence based upon a formula that takes into account the severity and characteristics of the offense, as well as the defendant's criminal history, if any. Parole has been abolished in the federal system. Under Sentencing Guidelines, defendants who are given custodial terms must serve nearly all that time.

An Indictment is a formal charge made by a grand jury, a body of 16 to 23 citizens. Grand jury proceedings are secret, and neither persons under investigation nor their attorneys have the right to be present.

Despite Indictment, every defendant is presumed innocent, unless and until found guilty beyond a reasonable doubt, following a trial at which the defendant has all of the trial rights guaranteed by the U.S. Constitution and federal law.

Christie credited Postal Inspectors of the United States Postal Inspection Service's Bellmawr and Philadelphia offices, under the direction of Inspector in-Charge Ira Carle, of the Philadelphia Division, with developing the investigation which resulted this Indictment.

The Government is represented by Assistant U.S. Attorney R. Stephen Stigall of the Criminal Division in Camden.- end -

Defense Attorney: Steven Robert LaCheen, Esq. Philadelphia