National Cash Register founder Richard A. Schiavo is to be sentenced for wire fraud and tax evasion in front of a jury April 12, federal prosecutors say. He was found guilty by a jury in November of orchestrating a years-long fraud that bilked more than 50 bank customers out of $87 million.
Schiavo faces up to 20 years in prison for wire fraud and faces a maximum five years for the tax offenses. He must also pay back all the money.
“A man once known for his leadership role in the rental payment industry has long since stolen from the very people he was supposed to be helping,” said U.S. Attorney Geoffrey S. Berman. “He used his company, company charities, company financial records, and company credit card accounts to enrich himself and his friends while taking millions from his bank account and stealing from his customers.”
Schiavo, who started NCR in 1962 with his brother and founder, Gerald Schiavo, made his fortune buying struggling companies.
His companies specialized in rent-to-own products — including subprime, payday and rental foreclosures.
He was the “Oracle of Cash” for the president of Oklahoma-based Hallmark Cards, according to the New York Times.
In 2012, Schiavo was sentenced to 21 months for dealing in the proceeds of a crime by Norman, Okla.-based Dakota Management Services, after his company billed Hallmark for loans.
Despite the conviction, Schiavo continued to take money.
In 2008, he started a company called National Cash Register, based in Irving, Texas, according to the indictment. Schiavo allegedly used a shell company called National Cash Logistics as a vehicle to launder funds from NCR.
For years, his company charged customers about 70 percent more than contracted and provided inaccurate bills and paperwork, federal prosecutors said.
His scam included:
Selling items including goods such as purses, clothing, jewelry, electronics, hair care products, and health-care products
Selling so-called loans and inflow fees through a company called Country World Loan
Charging the customers amounts ranging from $100 to $1,000, and through the later year. Schiavo was allegedly able to take the more than $87 million from customers by:
1. Undertaking loans and invoices from customers in December through April.
2. Promoting discounts and secret commissions for assisting customers in delaying payments, a maneuver that allowed NCR to falsely inflate the amounts owed to customers.
3. Taking the customers’ money without their knowledge or permission, authorities said.
“Richard Schiavo gave a ring of deception to hide his criminal activity,” said FBI Special Agent James Fetzer, who worked the case. “For the sake of his victims, I hope he’s brought to justice, and he really deserves a stiff sentence.”