US v. Brandon Johnston/ 16-CR-209 ( 2016R00312)

A federal grand jury has indicted Brian Keith Wallen, age 52, of Lutherville, Maryland, and Andrew Stafford, age 56, of Bel Air, Maryland with conspiracy to commit mail fraud and mail fraud arising from a nationwide fraudulent telemarketing scheme designed to ship unwanted and vastly over-priced light bulbs and cleaning supplies to thousands of businesses and non-profit organizations.  The indictment was filed on June 30, 2016 and unsealed upon the arrest of Andrew Stafford.  Brian Keith Wallen was reported missing on April 28, 2016, and is still being sought by law enforcement. Specifically, the indictment alleges that from about 2007 to 2014, Wallen, Stafford and other conspirators telephoned authorized representatives of businesses, who were often maintenance employees, on behalf of Midway companies. During these phone calls, the conspirators sought to conceal Midway’s true locations in Reisterstown, Maryland and in Florida.  According to the indictment, during the initial calls, Wallen, Stafford, and the conspirators promised national store gift cards to the authorized representatives to induce them to place initial orders, or to provide Midway with additional company information or personal information, like the authorized representatives’ home address and personal phone number.  The conspirators used the cell phone numbers and/or birthdays of the authorized representatives as “purchase order” numbers in order to lend legitimacy to later collections efforts.In addition, during the calls the conspirators allegedly made false statements, including: that the victim businesses had an existing business relationship with Midway; and that Midway would send a “half box” of light bulbs.  In fact, the “half box” was a deceptive technique used to understate the volume and price of shipments, and disguise unwanted future shipments.  Wallen, Stafford, and the conspirators allegedly did not divulge the price of any products, engaging in a practice called the “price blow-off,” falsely telling the victim business that they did not have the price in front of them, but that it would be at the corporate discount.  In fact, Midway did not offer a corporate discount.The indictment alleges that as a result of the fraud scheme, Midway sent fraudulent invoices to victim companies for more than $100 million and received more than $50 million in payments on those invoices.