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TELEMARKETER PLEADS GUILTY TO WIRE FRAUD.


Byline: Mary Beth Alexander Daily News Staff Writer

A 65-year-old Northridge man pleaded guilty Friday in federal court to running three businesses that fraudulently fraud·u·lent  
adj.
1. Engaging in fraud; deceitful.

2. Characterized by, constituting, or gained by fraud: fraudulent business practices.
 promised investors guaranteed sales of car-care products.

In connection with his plea, Kenneth Joseph Gilson admitted that from 1986 to 1992 he was part-owner and operator of three Van Nuys telemarketing telemarketing, the practice of selling goods or services to customers by means of the telephone or of surveying consumer preferences in telephone conversations.  companies that enticed customers to become distributors of large quantities of car-care products by falsely promising the products already had been sold to buyers for a profit, officials said.

The distributors paid $6.9 million for products that they were stuck with and unable to sell for the amount of their investments, officials said. Gilson and his companies - S & G Enterprises; Energo Inc. and Astro Petroleum - kept $2.6 million, court officials said.

Gilson pleaded guilty before U.S. District Court Judge Consuelo B. Marshall to wire fraud, tax evasion The process whereby a person, through commission of Fraud, unlawfully pays less tax than the law mandates.

Tax evasion is a criminal offense under federal and state statutes. A person who is convicted is subject to a prison sentence, a fine, or both.
 and conspiracy to commit the two felonies.

The pleas stem from charges that Gilson failed to report a bulk of the money he and his companies kept to the Internal Revenue Service, resulting in $610,000 in unpaid corporate and personal taxes, officials said.

A co-operator of the companies, Steven Smason, 63, of Sherman Oaks pleaded guilty in January to the same charges as Gilson. Both are scheduled to be sentenced Aug. 5.

Two telephone salespeople sales·peo·ple  
pl.n.
Persons who are employed to sell merchandise in a store or in a designated territory.
 who worked for Gilson and Smason also have pleaded guilty to similar charges, officials said.

Patrick Tanzillo, 32, pleaded guilty Jan. 9 to conspiracy to commit wire fraud and tax evasion. John Eaker, 48, pleaded guilty Jan. 22 to conspiracy to commit wire fraud.

The fraud was uncovered during a joint investigation by the Internal Revenue Service in Oxnard and the Federal Bureau of Investigation Federal Bureau of Investigation (FBI), division of the U.S. Dept. of Justice charged with investigating all violations of federal laws except those assigned to some other federal agency.  in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. .
COPYRIGHT 1996 Daily News
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1996, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Daily News (Los Angeles, CA)
Date:Mar 2, 1996
Words:289
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