The lawyer representing disgraced former Systemax exec Gilbert Fiorentino, who is awaiting sentencing for committing fraud while employed there, has cast the man as having had issues with alcohol, but said he'd since become an upstanding citizen who did "charity work".
Back in November, the Feds charged Fiorentino and his brother Carl over scams and tax evasion totalling $9m, perpetrated over multiple years. They joined Systemax in 1995 when it acquired Tiger Direct, which they co-founded and ran.
It was alleged the pair – who resigned in 2011 – received kickbacks in exchange for directing business to specific suppliers, including pushing $230m worth of component orders to an Asian manufacturer.
The duo pleaded guilty on 2 December, and with sentencing around the corner (a hearing is set for 3 March), Gilbert Fiorentino’s legal brief, Sam Rabin, has asked for a reduced term.
In the defence’s response to a pre-sentence investigation report [see here - PDF], Rabin said "[Gilbert Fiorentino's] acceptance of responsibility has been immediate and complete. His remorse is both sincere and profound".
He had helped both the SEC and Systemax in their investigations, the letter added.
Gilbert Fiorentino pocketed hundreds of thousands of dollars in cash payments, some of which were delivered to a parking lot in the Miami offices of Tiger Direct. He also received $150,000 worth of gold coins, and received luxury furniture and other goods for his dodgy deals.
Rabin pointed out that Fiorentino has already paid Systemax $11m in cash and vested shares of stock to resolve threatened civil litigation from the firm, and coughed up roughly $200,000 to the IRS for estimated taxes due.
Fiorentino also paid a $65,000 fine to the SEC and agreed never to again serve as an officer or director of a public company.
“During the past [near] four years, Mr Fiorentino has tried to resolve his financial liability in this case. It has been costly, financially, physically and emotionally, and has greatly affected Mr Fiorentino’s health,” the letter stated.
It added Fiorentino began suffering “extreme depression, anxiety and panic attacks” by late 2011, and that he had “lost” his professional, personal and social life, becoming estranged from his brothers.
“He spent significant sums trying to resolve his liability and ‘make things right’ but all the while, he was abusing alcohol, Xanax (anti-depressants) and Ambien (sleeping pills) to cope with his ‘downfall’.”
According to the letter, he had been drinking eight bottles a week, although the letter did not state if this was beer, wine or alco-pops.
By mid-2012, he emerged from the black cloud hanging over him and began to “donate his time as a mentor and advisor to numerous startup companies ... he began to attend church and he became involved in religious classes”.
Fiorentino became involved in KIPU, a software development company for electronic records used by the substance abuse treatment industry.
“He eventually became one of the co-founders of the company,” the letter from Rabin stated, adding that he was also made CEO. This business, and its 35 staff, are put at risk by his imprisonment, Rabin said.
The letter claimed Gilbert Fiorentino was a charitable man, who has “always said 'yes' to those in need”, and added that he hadn’t make any mass redundancies when at Systemax.
The court missive pointed out that Gilbert Fiorentino was a first-time offender, and at 55 years old would be considered an elderly inmate who has health problems related to Type II diabetes and atrial fibrillation.
“In short, Mr Fiorentino comes before this court a far different person than when he involved himself in criminal activity several years ago,” it added.
“Mr Fiorentino asks this court to consider that this offence is but a small slice of an otherwise remarkable life ... and to consider a sentence that will not separate him from his loved ones and others who need him for any longer than the court deems necessary,” the letter concluded.
Gilbert Fiorentino’s crimes carry a maximum sentence of five years. His brother Carl, who was charged with conspiracy to commit mail and wire fraud, money laundering and tax evasion is facing up to 25 years, the FBI warned last November. ®
The case is 14-20854, US District Court, Southern District of California, presiding Judge Jose E. Martinez.