Greenbelt, Maryland - United States Attorney Thomas M. DiBiagio, Lynne A. Hunt, Special Agent-in-Charge of the Federal Bureau of Investigation, Vicki S. Duane, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigative Division, and Martin F. Malarky III, Territory Manager for Internal Revenue Agents of the Small Business/Self Employed Division, announced today that Reza Rashidian, 33, of the 10400 block of Dalebrooke Lane in Potomac, Maryland, was sentenced to 21 months imprisonment following his guilty pleas to charges of mail fraud and causing the preparation of false tax returns. U.S. District Judge Deborah K. Chasanow also ordered Rashidian to pay a $50,000 fine and $1,000,000 in restitution to Hewlett-Packard Corporation ("HP"), the victim of the mail fraud scheme. Following his jail sentence, Rashidian will be on three years supervised release. He was also ordered to pay $200 in special assessment fees.

Rashidian pleaded guilty to the two felonies in December 2001. At that time, a corporation Rashidian controlled called Computer Intelligence Association, Inc., also pleaded guilty to the mail fraud scheme, was fined $400,000 and ordered to pay $400,000 in restitution to HP. Another related corporation, International Business Management, Inc., pleaded guilty to interstate transportation of property obtained by fraud, was fined $237,950, and ordered to pay $237,950 in restitution to Intel.

In the case involving Rashidian and Computer Intelligence Association, Inc., the evidence showed that between approximately 1993 and 1998, the defendants schemed to defraud HP by falsely representing that Rashidian had purchased new HP laser printer cartridges that were defective in order to secure refunds, credits and replacements for them. Rashidian, and later Computer Intelligence Association, Inc., purchased or acquired empty HP cartridges, sent them to HP, and falsely represented that the cartridges were defective, and thus caused HP, through its distributors, to issue refunds, replacements or credits. The ultimate cost of these fraudulent refunds, replacements and credits was borne by HP. The approximate total loss to HP from the scheme to defraud was $1.4 million.

In the separate tax charge against Rashidian, the government presented evidence that during 1996, Rashidian accepted checks from persons to whom he had sold goods obtained as part of the fraud scheme set forth above, and deposited the checks to the bank accounts of corporations under his control, including Computer Intelligence Association, Inc. Rashidian then caused the deposits to be falsely recorded on the books and records of the corporations as loans from a shareholder or repayments by a shareholder of outstanding loans. On or about March 29, 1997, Rashidian willfully aided, assisted in, counseled and advised the preparation and presentation to the Internal Revenue Service, of U.S. Corporation Income Tax Returns for calendar year 1996 which were fraudulent and false as to material matters; specifically, (1) a tax return for Advanced Network Systems which reported taxes due and owing of $5,813, when in fact the defendant then and there well knew and believed that the proper tax due and owing was $139,336, and (2) a tax return for Computer Intelligence Association, Inc. which reported taxes due and owing of $34,965, when in fact the defendant then and there well knew and believed that the proper tax due and owing was $138,221.

This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigative Division, along with IRS agents of the Small Business/Self Employed Division, and was prosecuted by Assistant U.S. Attorney Stuart A. Berman of the Greenbelt office.