2 sports gear firm execs charged in fraud scheme
Criminal Law
Two former executives of a sports equipment company were charged Wednesday with fraud for allegedly swindling dozens of schools in northern New Jersey by forging fake bids from competitors, inflating invoices and courting school officials with gifts.
Mitchell Kurlander of Allentown, Pa., and father-in-law Alan Abeshaus of Highland Beach, Fla., made initial appearances in federal court in Newark on Wednesday afternoon. They each face a conspiracy count, and Kurlander faces multiple mail- and wire-fraud counts, punishable by up to 20 years in prison.
Bail was set at $500,000 for Kurlander and $250,000 for Abeshaus, both secured by property.
The U.S. Attorney's Office said the two men used their company, Easton, Pa.- based Circle System Group, to defraud schools and youth sports programs over a 10-year period ending in 2007. The company, which was bought by Schutt Holdings in 2005, according to the indictment, primarily reconditioned football helmets and shoulder pads for resale.
According to the indictment, the scam worked in a number of ways. For instance, the company allegedly sent schools monthly statements that looked like invoices, leading many schools to pay the same invoice twice. Prosecutors allege the company reaped nearly $1 million in overpayments this way, and kept most of the money.
The company is alleged to have created fake price quotes from competitors that Circle would undercut in order to win contracts. The indictment also accuses it of inflating invoices, sometimes to reimburse the company for money it had donated to the schools' fundraising and charity efforts.
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