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Join Date: Feb 2001 Location: Jupiter & Ft Laud FL
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|  Did anyone know these guys? Or buy the DVDs?
Just passing this along....
While two Mercury Marine Inc. managers were making illegal copies of videos, cheating their employer out of hundreds of thousands of dollars, they glazed over their office windows to avoid detection. Yet they openly joked about their activities with a janitor.
The duo purchased thousands of dollars' worth of DVD and CD players and recorders, as well as computers and software, and had the equipment installed in their offices at Mercury Marine's distribution center in Fresno, Calif.
They would then rent or purchase movies, make illegal copies, and sell them on eBay.
The cost of the copying equipment, and postage for mailing the bootleg material, was charged to Mercury Marine, a Fond du Lac company that makes outboard boat engines and is part of Brunswick Corp., the world's largest recreational boat manufacturer.
Some of the shenanigans went on for roughly seven years before the two men were caught.
One of the men, John Edward Lemmenes, was recently sentenced to three years and 10 months in federal prison for his part in the scheme. His partner, Robert C. Cox, is scheduled to be sentenced Thursday in U.S. District Court in Fresno.
Lemmenes, 57, pleaded guilty to conspiracy and copyright infringement. Cox, 54, pleaded guilty to the same charges plus wire fraud and mail fraud.
Prosecutors are seeking $642,011.72 in restitution and want the two to reimburse Mercury the wages they were paid while running the illegal operation.
The two were trusted, salaried employees, said Assistant U.S. Attorney David Gappa.
In addition to the movie copying, their scheme also included unauthorized charges to Mercury for things such as automobile repairs, home improvement items, shipping Mary Kay cosmetics, and a courier service operated by Cox's spouse.
Lemmenes was Mercury Marine's regional distribution manager and Cox managed the Fresno warehouse. They were the only two salaried employees at the facility which had four other employees and ships outboard engines and parts to West Coast boat dealerships.
According to police reports, court documents and interviews with attorneys, Lemmenes and Cox launched their scheme on a small scale, sometime after 1998, while making a few illegal copies of movies.
Over roughly seven years, they copied thousands of movie titles including popular films such as "Crocodile Dundee," "Ocean's 11" and "Karate Kid."
Lemmenes, a longtime Mercury Marine employee, got involved after running into personal financial troubles, according to his attorney, Roger Vehrs.
"John bought a house that maybe was more than he could afford. Then his wife started going to nursing school and he became the sole supporter of the family. It was just one thing after another, until they were in some deep financial water," Vehrs said.
Together, the two men netted at least several hundred thousand dollars from their illegal activities.
Lemmenes and Cox were equally liable, prosecutors said, even though they played different roles.
Cox's attorney, Robert Rainwater, did not return calls about the case.
It was Cox who cooked up the scheme and pressured Lemmenes into it, according to Vehrs.
Cox did prison time for a previous fraud involving millions of dollars, Vehrs said. Despite Cox's criminal record, and the fact that he was still on parole, Mercury Marine hired him in 1998 and two years later named him manager of the Fresno warehouse.
Prosecutors claimed that Cox billed Mercury Marine for expenses related to an Internet-based Mary Kay cosmetics business that he and his wife operated.
Court filings noted:
"Once an online sale was consummated, Vikki Cox would package the items using materials purchased at the expense of Mercury Marine. She would deliver them to the Mercury Marine distribution center, affix U.S. postage issued by a postage meter funded by Mercury Marine, and then take them to the United States Post Office for shipping. Robert Cox and Vikki Cox would then create and submit an invoice for delivery services, in the name of Vikki Marquis, to Mercury Marine."
For his part, Cox claimed that Lemmenes was the scheme's leader. Lemmenes, not Cox, had the most authority to bill the company for purchases.
Good reviews
Cox received good job performance reviews, according to court filings by his attorneys.
"They paid him to do a job, manage the warehouse, and he did that. If an employer could get restitution, after firing an employee, for spending time on personal matters at work, almost anyone would be guilty of that, i.e. what employee does not look at the Internet during work hours, pay a bill, answer email, or merely stare out the window? These costs are not legitimate losses by the company," his lawyers wrote.
Besides making thousands of illegal copies of DVDs, prosecutors said, Lemmenes billed Mercury Marine for tens of thousands of dollars in personal expenses such as car repairs, home improvement items, and over $11,000 in unauthorized cell phone charges.
Investigators said the regional manager told an auto shop mechanic that he owned the Mercury Marine distribution center, which he didn't, and that it was OK for him to bill the company for work on his personal vehicles.
Lemmenes and Cox glazed their office windows in an attempt to cover up their activities. But while sometimes they were secretive, other times they openly joked about it with a janitor who had asked them about the copying equipment.
The janitor told Cox and Lemmenes that he should charge them "protection money" for minding his own business, according to police investigators. He also told police that he was afraid that he or his wife would be harmed if he "snitched" on the two managers.
Eventually, a warehouse employee blew the whistle on Lemmenes and Cox through an anonymous tip line.
When Brunswick officials made an unannounced visit, in February 2005, they witnessed an illegal DVD being made in Lemmenes' computer as they questioned him about the suspected wrongdoings.
Both men were fired on the spot.
Mercury Marine officials declined to say why it took the company so long to discover they had been cheated out of hundreds of thousands of dollars in unauthorized expenses.
"We were encouraged to see that our system did work, even if on a delayed basis," said company spokesman Steve Fleming.
Prosecutors have pressed for restitution, although Mercury Marine probably won't get the full amount now that Lemmenes is imprisoned and Cox faces a prison sentence.
"The company is really hot under the collar about this, so they are going to chase these guys to the ends of the earth," Vehrs, the attorney for Lemmenes said.
The company exaggerated its losses, Vehrs said, and want Cox and Lemmenes to cover hundreds of thousands of dollars spent on an internal investigation.
Also, the Motion Picture Association estimates that Cox and Lemmenes owe $100,000 for copyright violations.
Lemmenes was employed by Mercury Marine for more than 33 years.
After he was fired, Lemmenes managed to land a job as an appliance salesman. But he lost that job when his employer learned about the federal case against him.
"He's paying a heavy price for this," Vehrs said. "He's sorry that he did it, and it was stupid on his part . . . But until this happened, my client had never been in trouble for anything in his life. He was just a real nice guy, with a nice wife and an all-American family. Now his whole life is shot."
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