djy: And interestingly, this was your 6,666th
post. ;-)

I thought some might find this news story interesting.
This scam has a history dating back to the late
1980's.

St. Louis Post-Dispatch (Missouri) February 16,
1990, FRIDAY, FIVE STAR Edition

4 BROTHERS INDICTED IN SWINDLE

Tim Bryant Of the Post-Dispatch Staff

Four brothers and companies they controlled were
indicted here Thursday in a multimillion-dollar
stereo speaker scam that authorities said operated
throughout North America and in Australia. The
scheme started slowly in 1982 but ran up more
than $24 million in sales during the last 18 months
of its operation, authorities said. Proceeds were
from cash sales of poor-quality speakers passed
off as speakers worth $849 each. Typically, young
men recruited as salesmen peddled the speakers
from the backs of vans, authorities said. Salesmen
falsely told customers they were deliverymen who
had been loaded with more speakers than they were
supposed to deliver, the indictment said. James
G. Martin, the assistant U.S. attorney who brought
the indictment, said federal authorities - including
Internal Revenue Service agents - began investigating
the case July 13. They were helped by some former
sales people. ''We have many former employees
as witnesses,'' Martin said. Among those indicted
were Ray, Gary, Thomas and Robert Sophie, brothers
from the Chicago area. Gary Sophie was president
of Network Sound Inc., of Schaumburg, Ill., Network
Sound is one of five companies charged in the
indictment, all in Schaumburg. The indictment
identified the other Sophie brothers as executives
of the companies. Network Sound began making the
speakers in Schaumburg in 1987 and distributed
them to other companies it controlled, Martin
said. The Sophies, all in their 30s, were expected
to surrender soon to federal authorities here.
Although the speakers came in large cabinets and
were packaged to make them appear expensive, each
speaker cost only $35 to build, Martin said. The
indictment said the sales scheme worked this way:
Salesmen told customers that the speakers normally
were available to bars and other commercial establishments
only. Phony invoices showed that the speakers
sold for $849. The salesmen would then sell customers
a pair of speakers, usually for $200 to $500 in
cash. The sellers were aggressive, hawking the
speakers on parking lots, at gas stations and
sometimes in moving traffic. The speakers, known
as Acoustic Monitor dbIV and Dynamic Audio 1901,
were sold here in the first half of 1988 and last
summer, authorities said. The indictment said
the defendants operated offices in more than 40
cities in the United States, Canada and Australia.
Indicted with the Sophies were: Thomas McGough,
Michael O'Hare and Guy Follet Jr., said to be
officers or managers of some of the companies
charged. McGough is from the Chicago area. No
other information was available about O'Hare or
Follet. The indictment charged the defendants
with mail fraud, wire fraud and money laundering.

SBD