7 Plead Guilty to Fraud in ‘Boiler Room’ Scam

Seven owners and operators of a telephone marketing “boiler room” pleaded guilty in U.S. District Court in Los Angeles on Thursday to 14 counts of mail fraud for using high-pressure sales techniques, subtle bribery and lies to persuade office managers to buy excessive quantities of copy machine toner at grossly inflated prices--a swindle federal prosecutors said grossed more than $14 million in four years.

Copy Supply Warehouse, based in the Fairfax District with at least seven offices nationwide, was one of the largest “toner phoner” operations in the country, Assistant U.S. Atty. Gary S. Lincenberg said. Consumer bureaus and law enforcement officials received “hundreds” of complaints from hospitals, schools and businesses whose office managers had fallen prey to the scheme, Lincenberg said.