NCJ Number
66069
Journal
ECONOMIC CRIME DIGEST Volume: 6 Issue: 1 Dated: (OCTOBER-JANUARY 1980) Pages: 11-15
Date Published
1980
Length
5 pages
Annotation
INVESTIGATION OF A COLORADO-BASED INVENTION-MARKETING CORPORATION REVEALED LARGE-SCALE FRAUD NETTING THE COMPANY ABOUT $1.5 MILLION DOLLARS IN CLIENT FEES.
Abstract
THE ALLIED RESEARCH AND MARKETING CORPORATION OF DENVER ADVERTISED THAT IT WOULD PERFORM A FREE EVALUATION OF ANY INVENTION, AND FOR A FEE OF $2,500, IF THE EVALUATION WAS POSITIVE, THE COMPANY WOULD MARKET THE INVENTION TO BUSINESSES OR MANUFACTURERS. THE CLIENT WOULD RECEIVE THE ROYALTIES. ALL OF THE COMPANIES' ACTIVITIES WERE DESIGNED TO ENTICE THE FEE FROM THE CLIENT. AFTER PROCURING THIS FEE, HOWEVER, THE COMPANY INTENTIONALLY AND DECEPTIVELY FAILED TO PERFORM AS PROMISED. CONSUMER COMPLAINTS FROM DISSATISFIED INVENTOR-CLIENTS PROVIDED INFORMATION NECESSARY TO LAUNCH AN INVESTIGATION. CONSUMER ADVOCATES POSED AS CLIENTS AND OBTAINED INFORMATION FROM EMPLOYEES AND FORMER EMPLOYEES OF THE COMPANY. THEN A SEARCH WARRANT WAS ISSUED. COMPANY FILES WERE SYSTEMATICALLY EXAMINED AND THE INFORMATION PROVIDED WAS RELATED TO VARIOUS CHARGES AND THE DEGREE OF CULPABILITY OF EACH COMPANY EMPLOYEE AND THE OWNERS. THE EVIDENCE PRODUCED BY THE INVESTIGATION RESULTED IN THE CONVICTION OF THE COMPANY'S PRESIDENT AND HIS BROTHER ON 14 COUNTS OF THEFT BY DECEPTION AND CONSPIRACY. CULPABLE EMPLOYEES PLED GUILTY AS A RESULT OF PLEA NEGOTIATIONS. THE NOW DEFUNCT CORPORATION WAS ALSO FOUND GUILTY OF 10 COUNTS OF THEFT AND WAS FINED $150,000, ALTHOUGH THE FIRM GROSSED ABOUT $1.5 MILLION. (RCB)