In carrying out a $2.5 million fraud scheme, a top executive at the now-defunct Erie Copy Products Inc. used a technique similar to a trick popular among crooked car dealers.
Instead of rolling back odometers, Mary Beth Nagorski, 51, helped roll back the counters on copiers.
Nagorski, Erie Copy Products' vice president for finance, also forged documents and submitted fraudulent records to lenders.
The result, according to her guilty plea in federal court in Erie on Friday, was that Nagorski and her co-defendant, Frederick Zurn, Erie Copy Products' president and chief executive, conspired to defraud customers and lenders of more than $2.5 million between July 2004 and May 2011.
Nagorski, of the 600 block of East 31st Street, pleaded guilty to one felony count of conspiracy to commit wire fraud. She faces up to 30 years in prison at her sentencing Feb. 28 before U.S. District Judge Sean J. McLaughlin.
Her sentence is expected to be far less because of the guilty plea and other factors.
Zurn, 58, pleaded guilty in July to all 11 counts against him, including conspiracy to commit wire fraud, and will be sentenced Nov. 27. He and Nagorski are free on unsecured bonds of $10,000.
Zurn and Nagorski perpetuated the fraud for 15 years, though the charges covered the time within the statute of limitations, Assistant U.S. Attorney Christian Trabold said.
Central to the scheme were lease payments that Erie Copy Products received for copiers and other office equipment. Finance companies would pay Erie Copy Products, 2820 W. 12th St., the full lease amount up front, and the companies would collect payments from customers who leased the equipment.
Trabold said the fraud victimized more than 50 customers and finance companies, and that customers tipped off investigators.
Zurn and Nagorski worked together so Erie Copy Products got lease payments that were too high or that the company should have never received, Trabold said in court. Nagorski, among other things, forged documents to show that a customer had leased equipment when a customer had not, Trabold said. Erie Copy Products got the money anyway.
In addition, according to the charges, Zurn and Nagorski conspired to roll back the counters on copiers to make used equipment appear newer. Erie Copy Products then leased the used equipment at rates for more costly newer equipment.
That part of the scheme interested McLaughlin, who broke in as Trabold recited the charges.
"It's like rolling the odometers back on cars," McLaughlin said.
ED PALATTELLA can be reached at 870-1813 or by e-mail. Follow him on Twitter a twitter.com/ETNpalattella.
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