Lawson Products Sales Agents Indicted on Fraud
April 25, 2007Sales agents for Lawson Products, Des Plaines, IL, have been indicted on federal fraud charges. The sales agents allegedly paid kickbacks totaling $140,000 to employees of some of their customers, including suburban municipalities, school districts, a non-profit organization and private businesses.
;
They disguised the kickbacks as purchasing incentives, according to the US Attorney's office in Chicago. In return, the sales agents allegedly obtained higher sales commissions based on greater volume and prices.
;
Eleven of the defendants were charged in six separate cases in Chicago, while two additional cases were filed in Dayton, OH, and Philadelphia, PA. All of the cases involve commissioned sales agents for either Des Plaines-based ...
Sales agents for Lawson Products, Des Plaines, IL, have been indicted on federal fraud charges. The sales agents allegedly paid kickbacks totaling $140,000 to employees of some of their customers, including suburban municipalities, school districts, a non-profit organization and private businesses.
;
They disguised the kickbacks as purchasing incentives, according to the US Attorney's office in Chicago. In return, the sales agents allegedly obtained higher sales commissions based on greater volume and prices.
;
Eleven of the defendants were charged in six separate cases in Chicago, while two additional cases were filed in Dayton, OH, and Philadelphia, PA. All of the cases involve commissioned sales agents for either Des Plaines-based Lawson Products, Inc., or one of its subsidiaries, Drummond American Corp.
;
Lawson, which is publicly traded, and its subsidiaries have about $400 million in annual sales of products as hardware, tools and chemicals.
;
The charges follow the execution of federal search warrants in December 2005 at Lawson facilities.
According to the indictments, the Lawson businesses -since as early as the 1990s -ran a program called Winners Choice," in which Keogh Inc., would issue checks to individuals purchasing Lawson merchandise on behalf of their employers. The sales agents would order "Certificates of Award" for individuals designated by the sales agents.
;
The certificates, often awarded in multiple $25 increments, entitled recipients to receive checks for a certain amount that could be used to purchase items at various retail stores.
;
Keogh, Inc., would then issue the checks, oftentimes in $50 increments. One defendant charged allegedly received $80,000 worth of checks through this program. The kickbacks were allegedly a way for the sales agents to increase their commissions and the prices paid by their customers.
;
The programs ended following the execution of the search warrants, authorities said.
;
All of the defendants will be arraigned at later dates in U.S. District Court.
 |
|
| View the Top Distributors in 12 Sectors: | |
| 2011 Distribution Landscape Report: Access Now | |
Join MDM's Independent Distributor
Network 
Follow MDM on Twitter
Sponsored Links
- Cloud ERP, the next innovation in distribution software. Learn more.
- Get better eCommerce, an easier back-end, and increase revenue.
- Free GCommerce whitepaper: How to reduce transaction costs, streamline special orders
- Cloud ERP, the next innovation in distribution software. Learn more.
- Protect your revenue and grow your business with Cortera PulseTM
- NSK's P4Y precision-class universal bearings' multiple configurations reduce inventory
- Resources and training tools for distributor sales, management and more in the MDM Store
MDM Digital
 The Case for Mobilein Distribution Marketing John Sonnhalter explains why distributors should include mobile in their marketing plans and how to start. Watch now. iPad users: click here to view. |
 Economic Update:The Festering Euro-Crisis MAPI Economist Kris Bledowski analyzes the outcome of recent meetings about the European banking and debt crisis. Watch now. |
 Online Marketing Tipsfrom Bob DeStefano Many companies make the same mistake on their company websites. Do you? Find out. |
More Audio and Video Features from MDM: |
Think About It: |
Upcoming Programs
|
|
Training Resources
 |
 |
 |
 |
|||
|
Featured Article - MDM-Baird Benchmarking Survey: Distributor Optimism Returns $34.95 |
Management Tips from Modern Distribution Management $49.95 |
Inventory Management Best Practices with Jon Schreibfeder: DVD + Book $119.00 |
Benchmarks & Best Practices: The Answer Book for Growth-Minded CFOs & Controllers $249.00 |
| Title | Company | Location |
|---|---|---|
| Credit/Collections Manager | APR Supply Co. | Lebanon, PA |
| Management Trainee | APR Supply Co. | Lebanon, PA |
| INDUSTRY SPECIALIST - Rubber Products | KAMAN Industrial Technologies | North East Area - CT, MA, ME, NY, RI, VT |
| Sales Account Manager - Energy Market Segment | TESSCO | Baltimore, MD |
| Channels Marketing Representative -- Advanced Supply Chain Business Information Systems | Scientel Information Technology, Inc. | Southeast Michigan |
| Technical Trainer - Innovative Change Agent - Long Island City, NY | Daikin AC | Long Island City, NY |
| Sales Representative | Superior Essex | Minnesota |
| View ALL Wholesale Distribution Job Listings |
|
|
Industry Topics sponsored by
Distribution Trends
|
Economy
|
Management/Strategy
|
Interviews
|
Operations
|
Technology
|
Mergers/Acquisitions
|
Case Studies
|
Sales & Marketing
|
MDM Calendar
Mobile Technologies for Distributors with Steve Epner
Featured Products
Benchmarks & Best Practices: The Answer Book for Growth-Minded CFOs & Controllers
2011 MDM Market Leaders and Distribution Landscape Report
The B-to-B Online Marketing Toolkit:
A Step-by-Step Plan for Distributors and Manufacturers to Leverage Online Marketing
for Bottom Line Results
Leave a Comment