Thirteen sales agents for Lawson Products, Des Plaines, IL, have been indicted on federal fraud charges. The sales agents are accused of paying kickbacks totaling $140,000 to employees of some of their customers, including suburban municipalities, school districts, a federal agency, a non-profit organization and private businesses.

They disguised kickbacks as purchasing incentives, according to the Chicago U.S. Attorney’s office. 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 Lawson Products, Inc., or its subsidiary Drummond American Corp.

Lawson has about $400 million in annual sales of hardware, tools and chemicals. The charges follow the execution of federal search warrants in December 2005.

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, awarded in multiple $25 increments, entitled recipients to receive checks that could be used to purchase items at various retail stores. Keogh, Inc. would then issue the checks, oftentimes in $50 increments. Here are details:

Richard Vidor, 48, a former Lawson salesman, and Chicago Heights Fire Department mechanic Aniello Izzo, 39, were indicted on mail fraud. Izzo, who had authority to buy hardware, tools, chemicals and solvents, allegedly redeemed Winners Choice certificates for $3,840.

After the Winners Choice program ended, Vidor allegedly attempted to provide gift cards to Izzo in exchange for purchasing Lawson products, unaware that Izzo was cooperating with law enforcement at the time. Vidor also allegedly paid kickbacks ranging from $1,500 to $3,600 each to three additional employees who were not charged. Federal officials charge that the scheme enabled Vidor to obtain about $80,000 in sales commissions.

In another case, Peter Fonfara, 60, a former Drummond sales agent, and Greg Terry, 50, area director for Ada S. McKinley Community Services, were indicted together on mail fraud. Terry allegedly redeemed Winners Choice certificates for $28,000. Fonfara also is alleged to have paid kickbacks totaling $1,900 and $1,200 to two employees of the City of Blue Island, a Chicago suburb, who purchased chemical solutions from Drummond. Federal officials accuse Fonfara of fraudulently obtaining $150,000 in sales commissions.

Another former Drummond sales agent, Gary Goldman, 60, was indicted on one count of mail fraud and two counts of bribery. He is accused of providing Winners Choice certificates to a General Services Administration employee responsible for buying supplies to be used in a federal courthouse, and James Kramer, a GSA supervisor. Federal officials accuse Goldman of agreeing to pay Kramer $5,000 cash if he purchased $60,000 worth of paint from Drummond on behalf of GSA.

Scott Osika, 51, a former Drummond sales agent, Charles Schertzing, 50, director of maintenance for Skokie School District 72, and Joseph Bettuzzi, 40, director of maintenance for Skokie School District 71, were indicted on mail fraud. Federal officials allege Osika fraudulently obtained commissions of $60,177 from selling products to the two school districts. Osika allegedly provided kickbacks of $2,200 and $1,575, to Schertzing and Bettuzzi.

Xochitl Baker, 47, a Drummond sales agent responsible for Los Angeles and Long Beach markets, and Patrick McGowan, 48, building services supervisor for the City of Long Beach, were indicted on mail fraud for an alleged scheme that made McGowan nearly $11,000, federal officials said.

In the final case, Ron Gholdson, 46, a supervisor responsible for purchasing cleaning products for Indianapolis-based Reilly Industries, was indicted on mail fraud for allegedly obtaining $80,000 in redeemed certificates. The indictment alleges that the sales agent paid an additional $8,000 in kickbacks to a subordinate of Gholdson and that the sales agent fraudulently obtained about $350,000 in commissions.