- Associated Press - Tuesday, February 10, 2015

TRENTON, N.J. (AP) - Federal prosecutors in New Jersey say a Pennsylvania businessman used phony documents and straw buyers to fraudulently secure millions of dollars in discounted computer equipment from two companies.

Andrew Silverman pleaded guilty Tuesday to wire fraud. The 51-year-old Gladwyne resident faces up to 20 years in prison when he’s sentenced May 19 and will forfeit $2.5 million.

Prosecutors say the scheme ran from January 2008 through May 2012.

Silverman exploited Hewlett-Packard and Cisco discount programs that provided reduced prices on products used locally within a certain country and were not resold.

As the president and owner of a firm that sold computer hardware and software, Silverman wasn’t eligible to receive these discounts. So he recruited business owners to pose as buyers interested in getting a large amount of products, and directed these buyers to falsely tell the two companies that the products they sought would be used internally by their businesses and not resold.

Once the straw buyers fraudulently secured the discounts, Silverman sent them money via international wire transfers to cover the purchase cost. He then had the discounted equipment shipped to destinations other than the straw buyer’s businesses, including to New Jersey and other locations in the United States.

Silverman also admitted sending multiple emails to Hewlett-Packard representatives posing as a person interested in buying deeply discounted equipment. He also created a company to conduct negotiations with a Hewlett-Packard representative so he could fraudulently obtain discounted products.

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