U.S. Attorney James P. Kennedy, Jr. announced Robert Fisher, 79, of Daytona Beach, FL, who was convicted of conspiracy to commit wire fraud, was sentenced in Rochester, NY, to serve 18 months in prison by U.S. District Judge Elizabeth A. Wolford. The defendant was also ordered to pay restitution of $3.8 million to the Xerox Corporation, and $150,000 to the Internal Revenue Service.

Assistant U.S. Attorney Richard A. Resnick, who handled the case, stated Fisher’s company, RBM Imaging, was an authorized reseller of Xerox office equipment. Xerox is located in, among other places, Webster, NY. Xerox sells and leases office equipment, including printers, directly to end-user customers or to authorized resellers, like Fisher, who then resell or lease the office equipment to end-user customers. The office equipment requires toner and other products to operate. End-user customers order the toner for their printers from Xerox. Rather than pay Xerox upfront for the toner, the end-user customers pay Xerox based on the number of prints made with the toner. However, at all times, the toner belongs to Xerox until consumed by the end-user customers. At no time may the end-user customers sell the toner.

Co-defendants Kyle Haynes, Jason Haynes, David Haynes, and Bryan Day set up a sham company, HDH Graphics, to obtain approximately 63 Xerox printers from Fisher. Although HDH Graphics made few, if any, prints with the printers, the co-defendants fraudulently represented to Xerox that HDH Graphics was making prints using much more toner than the industry average. The prompted Xerox into shipping approximately $25 million worth of toner to HDH Graphics.

The Hayneses and Day then sold the fraudulently obtained toner for approximately $11 million to an individual in Miami, FL, and together with Fisher, they shared the profits from the fraudulent sale of the Xerox toner.

In executing the scheme, the Hayneses and Day repeatedly misrepresented to Xerox that they were making millions of prints with the toner, even though they never took most of the printers out of their boxes. They provided Xerox with false usage profiles from the printers and false print samples that made it appear that they were making millions of prints and using much more toner than the industry average for each print.

Co-defendants Kyle Haynes, Jason Haynes, David Haynes and Bryan Day were all previously convicted and sentenced in July. Kyle Haynes, Bryan Day and Jason Haynes were convicted of conspiracy to commit wire fraud and filing a false tax return, and were sentenced to serve 30 months, 27 months, and six months in prison respectively. David Haynes, who was convicted of filing a false tax return, was sentenced to a three-year term of probation. In addition, Kyle Haynes, Day and Jason Haynes were ordered to pay $9,475,000 in restitution to Xerox. David Haynes was ordered to pay $884,000 in restitution to Xerox. All four defendants were also ordered also to pay approximately $25,000 in restitution to the Internal Revenue Service.

The sentencing of Fisher wa the result of an investigation by Homeland Security Investigations, Buffalo Office, under the direction of Special Agent-in-Charge Kevin Kelly; and the Internal Revenue Service, Criminal Investigation Division, under the direction of Jonathan Larsen, Special Agent-in-Charge, New York Field Office.