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Consumer Alert: Con artists scam small companies out of millions


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LEXINGTON, Ky. (WKYT) - It's a scam that has been around for a long time, but it still works. Small companies have lost millions to con artists who charge for items never delivered.

A small group of con artists that zeroed in on medical groups or companies with less than 100 employees.

"The company would receive an invoice in the mail, usually for $600.00 for two cases of latex gloves," said Edward Kljunich, US Postal Inspector. "The quantity they were saying they were shipping was never sent to the companies."

The second problem...

"If the company did pay the first invoice, they would then generate a second invoice for a larger number, larger quantity, larger amount and send that to that company. If they paid that, they would increase it again," said Kljunich.

The con artists were charging for items they never sent and counting on no one in the company noticing.

"The left hand didn't know what the right hand was doing," said Kljunich.

The scammers made a killing.

"There were over 2.6 million dollars in losses and over 1000 victims nationally," said Kljunich.

Some advice for small companies, thoroughly check out a company before you do business with them.

"Make sure a process is in place so if something comes in, you know what it was and you know what you're paying for - not just sending a payment out for something you don't know you've received or not," said Kljunich.

Two of the three people charged in this case worked out a plea deal - one for three years in prison, and the other for five- years probation. The leader of the scam accidentally drowned two weeks before his trial was set to begin.


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