03, 24, 2011    2:07 EST

http://www.crn.com/news/channel-programs/229400234/var-begins-18-month-prison-term-for-fraud-money-laundering.htm;jsessionid=1Z69oqzd+VijHm1EzGQJFQ**.ecappj03

A Southern California solution provider started serving an 18-month prison sentence last Friday after pleading guilty to counts of conspiracy to defraud and money laundering, according to a judgment in the U.S. District Court for the Western District of North Carolina.

Mitchell Kleinman, then president and CEO of Ryjac Computer Solutions, an Irvine, Calif.-based VAR, pled guilty in December 2009 to counts of conspiracy to defraud and conspiracy to commit money laundering, according to the criminal judgment in the case.

Two other conspirators in the alleged scheme to overbill customers and then split the profits were also sentenced and one imprisoned. William Hagood received concurrent sentences of 60 months and 63 months for guilty pleas in counts of conspiracy to defraud and conspiracy to commit money laundering. He started serving the sentence Nov. 17, 2010. Alan Bellanca was sentenced to time served on similar counts.

In addition to time in prison, the three men were ordered to pay more than $2 million in restitution to the alleged victims in the case: $1 million to Chubb Insurance; $970,600 to Hickory Springs Manufacturing and $231,000 to U.S. Bancorp Equipment Finance, according to their judgments.

In December 2009, the three men pled guilty to helping defraud two customers out of nearly $3 million, according to court documents. According to court documents, from about 2000 to 2005, the scheme allegedly defrauded customers through invoices that "grossly inflated and were entirely fictitious in order to provide kickbacks to the conspirators," according to the complaint. Phone and e-mail inquiries to Ryjac's Irvine, Calif., office for a statement were not returned.