Chesterland Man Charged with Wire Fraud

Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, today announced that an indictment was filed against Joseph C. Knox charging him with one count of wire fraud. Knox, age 40, of Chesterland, Ohio.

The indictment alleges that the defendant operated various businesses in the Cleveland area, including American Sales Brokerage Company, a.k.a., American Sales Brokerage Inc., a.k.a., American Sales Company, Inc., Patel Properties Association, a.k.a. Commercial Supply Company, Inc., a.k.a. Commercial Hospitality Supply and New York Textiles and Amenities, and that the defendant held himself out through these businesses as being engaged in the business of selling products and supplies used in the hotel/motel industry. The indictment alleges that, through these companies, the defendant advertised deep discounts on hotel/motel supplies to attract business, sent these advertisements to hundreds of prospective customers by facsimile, and required that the prospective customers pay for the products in advance by check or wire transfer.

As part of the scheme to defraud, it is alleged in the indictment that Knox, after receiving prepayment from a hotel/motel customer, then supplied a partial shipment of supplies or no supplies at all, then avoided dealing with irate hotel/motel owners or managers by placing callers on hold for long periods of time, disconnecting the calls or advising the callers that nobody was available to assist them. All of this was in furtherance of a scheme to defraud known as an “Advance Fee Scheme,” whereby payment is required up front to receive a certain benefit (such as discounted prices on a product), and the victim receives little or nothing in return.

As a result of this scheme to defraud, it is alleged in the indictment that 537 hotels/motels lost a total of $1,666,274.32 between April 2006 and June 2008.

If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

This case is being prosecuted by Assistant United States Attorney Henry F. DeBaggis following an investigation by the Federal Bureau of Investigation.

An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.