ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, February 1, 1996 TAG: 9602010032
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
DATELINE: BOSTON
SOURCE: Associated Press
COLGATE GIVES nursing homes special discounts on its toothpaste. But along came the profit motive ...
Four men who allegedly diverted to retail stores millions of dollars in discounted Colgate toothpaste meant for nursing homes face wire and tax fraud charges, federal authorities said Wednesday.
The scam involved specially priced toothpaste the Colgate-Palmolive Co. produces for distribution to nursing homes and nonprofit institutions.
Prosecutors allege Geriatric Medical and Surgical Supply of Everett, Mass., was buying the toothpaste for 25 percent below Colgate's wholesale prices, then selling it through another company at a huge profit.
In the process, Ronald Peyser, 51, of Newton, and Arthur Siegal, 49, of Needham, allegedly paid two Colgate salesmen from New Jersey kickbacks to keep the supply of cut-rate toothpaste coming.
Colgate fired the salesmen Jan. 18, said Colgate spokesman Robert Murray. An internal investigation is continuing into the dealings of Lawrence Coder, 45, and Brian E. Fisher, 40, in Colgate's special sales division, Murray said.
``This all took place over a five-year period. That is why there was nothing particularly unusual that would have caused us to be suspicious,'' Murray said.
The four men were charged with conspiracy to defraud the Internal Revenue Service.
Peyser and Siegal also were charged with wire fraud and conspiracy to commit wire fraud. Each count carries penalties of up to five years' imprisonment and $250,000 in fines. No court dates have been scheduled.
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