An Elma businessman is accused of devising a scheme that allegedly cheated the U.S. Postal Service out of $350,000 over a period of less than two years.
William Toth, 41, of Elma operated the illegal scheme while running a Buffalo mailing services company called NETEX, the U.S. Attorney's office said in indictment papers on Thursday.
One of Toth's major clients was a Canadian company that rented out audio books through the mail, prosecutor Gretchen L. Wylegala said. Toth would collect a fee from the Canadian company for arranging for the deliveries of the audio books to the company's customers, and then for sending the audio books back to the Canadian firm.
Toth is accused of using a complicated scheme to underpay the Postal Service for making the deliveries. The alleged crimes took place between October 2004 and March 2006.
The U.S. Postal Service -- and not the Canadian company -- was the victim of the scam, Wylegala said.
In a March 2002 news conference announcing plans to expand his company, Toth described his firm as an international mailing service that was an agent of the Belgian postal system.
Toth is accused of mail fraud, money laundering and making false statements to a federal probation officer who was assigned to oversee him after a previous federal conviction in May 2002.
Agents from the U.S. Postal Inspection Service and the Internal Revenue Service worked on the case.