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Office Furniture executive charged with fraud scheme

Thursday 18 November 2010

An executive at a Lenoir furniture-manufacturing company is facing federal accusations that he created a dummy firm and billed his company for extra services concealed as processing fees, netting $563,000.
Indictments made public Wednesday show Andrew Geiger was director of manufacturing for Bernhardt Furniture Company\'s Casegood-Bernhardt contract division from 1996 to 2008.
Geiger had authority to negotiate contracts with third-party vendors, and in 1999 he made a deal with Viacraft Interiors Limited, a Canadian manufacturer, to produce office furniture. The products would be shipped to Bernhardt\'s facilities in Lenoir, and the company would pay Viacraft 34 percent of its list price.
Prosecutors say in 2000 Geiger set up a fake corporation called Furniture Works International Inc., which was run by Geiger, his wife and father-in-law. They aren\'t named in court documents or charged.
Once the company was in place, prosecutors say Geiger told Viacraft that FWI was a \"value added reseller\" and would be taking charge of repackaging, consolidating and shipping Viacraft\'s products for Bernhardt.
To help handle the expense of FWI\'s fee - 6.75 percent of the list price - Geiger said Bernhardt would pay Viacraft an extra 5 percent of the list price.
The indictment says Geiger then started sending Viacraft invoices, and caused Bernhardt to pay 39 percent to Viacraft instead of its agreed-upon 34 percent fee to cover Viacraft\'s extra costs.
The furniture from Viacraft was shipped to a warehouse in Statesville that Geiger hired to make it appear FWI existed, and unloaded and repackaged by Bernhardt employees on company time.
Geiger told them a variety of reasons why the furniture had to go to FWI, including that customs regulations prevented Viacraft from shipping it directly and that the Bernhardt facility was too busy to handle any shipments.
\"Any short-staffing at the Bernhardt factory was caused by Geiger stealing the labour of the Bernhardt employees,\" the indictment says.
Those employees were then directed to take the furniture to Bernhardt\'s warehouse - its original intended destination. In 2006, the indictment says, Geiger told Viacraft to ship the furniture directly to Bernhardt, but kept collecting the payments, which were deposited into an FWI account at Wachovia.
He faces charges of money laundering and wire fraud. Geiger couldn\'t be reached for comment on Thursday.

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