Former Systemax exec Carl Fiorentino, the man currently contesting charges of fraud related to his work at his former company, is the subject of a second federal probe, according to a recent US court filing.
This second probe was mentioned by his legal team at Pinera-Vazquez Law Firm in its petition to move the venue of the first probe from New York to the Southern District of Florida.
The second matter, an unspecified but "related" investigation, is being handled by the US Attorney Office's Economic Crimes Division and Internal Revenue Service, a filing by Fiorentino's legal representative confirmed in a New York Eastern District Court (NYEDC) last weekend.
"Mr Fiorentino was recently informed that he is the target of an ongoing criminal investigation in the US Attorney's Office for the Southern District of Florida," the document stated.
In support of its plea, his legal team also mentioned that a related civil case had been filed by Systemax in Florida, that most of the witnesses are based in the area and that the alleged violations took place there as well. In this matter, Fiorentino has filed a counterclaim "vigorously denying the allegations and asserting wrongful conduct by Systemax", his legal team said. It also mentioned that a special agent for the IRS, Aileen Martinez, is involved in both of the federal investigations.
In the first federal probe, currently still an NYEDC case, Fiorentino stands accused of taking kickbacks from suppliers while working at Systemax in return for placing orders for components. He was charged in June with pocketing more than $7m in bribes after placing around $230m worth of orders with two component-makers over a multi-year period. He was arrested but bailed.
He has pleaded not guilty to the accusations which include mail fraud, wire fraud, money-laundering conspiracy and conspiracy to commit mail and wire fraud.
If found guilty, Carl Fiorentino faces two decades in the slammer, will be forced to give up his $8m residence, over $7m in cash and cough a $250k fine, according to the NYEDC lawsuit.
Along with his brothers Gilbert and Patrick, Carl founded Tiger Direct and continued as an exec when Systemax hoovered up the business in 1995. The PC-building line at the firm has since closed.
Carl Fiorentino left Systemax in 2011, along with his brothers, when a whistleblower's allegations of fraud came to light. A lawsuit against Carl and Patrick was filed by Systemax in the same year. Both denied the allegations.
For his part, Gilbert was CEO of the Technology Products unit at Systemax until the whistleblower allegations came to light and he was put on administrative leave in April 2011.
He was investigated by the SEC and in June that year resigned. In September 2012 the federal agency released its findings, claiming he stole $200,000 of company merchandise used to market its products and organised extra payments when dealing with external service providers.
These payments were not disclosed to the business.
In return, Gilbert Fiorentino was forced to pay a $65,000 penalty and agreed to a "permanent bar" from serving as an officer or director of a publicly listed business. ®