The former Director of the Permanent Merchandising Systems Department at Gillette was sentenced today in federal court to 37 months in prison, following his guilty plea to eleven counts of mail fraud and wire fraud, along with two counts of subscribing to false tax
returns.
United States Attorney Michael J. Sullivan; Kenneth W. Kaiser, Special
Agent in Charge of the Federal Bureau of Investigation in New England; and
Joseph A. Galasso, Special Agent in Charge of the U.S. Internal Revenue
Service, Criminal Investigation, announced that GINO DELUCA, age 47, of 16
Lamplighter Lane, Walpole, was sentenced today by U.S. District Judge Douglas
P. Woodlock for defrauding his former employer, the Gillette Company
(“Gillette”). Judge Woodlock also ordered DELUCA to pay $724,829 in
restitution to Gillette. DELUCA will be on supervised release for two years
following his term of imprisonment.
DELUCA pleaded guilty to the charges in December of last year, at which
time the prosecutor related to the Court what the evidence would have proven
had the case proceeded to trial. From 1996 to August of 2002, DELUCA was the
Director of the Permanent Merchandising Systems Department (“PMSD”) at
Gillette.
This unit was responsible for the promotion and display of Gillette
grooming products, such as razors, Duracell batteries and Braun/oral care
products, within various retail establishments. Between 1998 and 2002, DELUCA
received close to $600,000 in kickbacks from vendors to whom DELUCA steered
lucrative Gillette business.
DELUCA pleaded guilty to numerous fraud charges
relating to the kickbacks he received from these vendors, including small
items such as electronic equipment, cameras, and vacations and larger ticket
items such as a new Isuzu Trooper automobile and $225,000 that was wired to a
Swiss bank account controlled by DELUCA. Two tax charges to which DELUCA
pleaded guilty stated that he failed to report over $325,000 in illicit income
that he received in 1999 and 2001.
The charges to which DELUCA pleaded guilty centered around his
relationship with four vendors: Top Marketing, MGM Graphics, Interesting
Display and Ideas, Inc., and Dascal and Associates. The vendors are alleged
to have received a combined $15 million worth of business from DELUCA in 2001
and 2002. According to the Indictment, DELUCA controlled the distribution of
$30 to $40 million in annual contracts. DELUCA instructed his subordinates to
select the vendors who were paying kickbacks to DELUCA and he ignored quality
issues that were raised about them.
DELUCA pressured one vendor, Top Marketing, to buy him over $15,000 worth
of small dollar items, such as stereo equipment, cameras, appliances,
televisions, exercise equipment, mother’s day gifts, clothes and a variety of
other retail products. As time passed, DELUCA began demanding more money from
Top Marketing in 2001 and 2002. First, the owner of Top Marketing, at
DELUCA’s insistence, paid $25,400 to a Worcester car dealership for DELUCA’s
new Isuzu Trooper. Later, the owner of Top Marketing had more than $225,000
wired to a Swiss bank account controlled by DELUCA.
DELUCA instructed another vendor, MGM Graphics, to prepare and submit
false and inflated invoices to Gillette which DELUCA then approved for
payment. DELUCA then instructed the vendor to send DELUCA $40,000 in a series
of five $8,000 checks, which DELUCA deposited into his bank account. DELUCA
used this money for a down payment on a Scottsdale, Arizona condominium. The
down payment formed the basis of a money laundering charge to which DELUCA
pleaded guilty. The owner of MGM Graphics was also forced to pay over $4,000
for an Aruba vacation DELUCA took with his wife in January 2001.
The case was investigated by the U.S. Internal Revenue Service, Criminal
Investigation and the Federal Bureau of Investigation. It was prosecuted by
Assistant U.S. Attorney Joshua S. Levy in Sullivan’s Economic Crimes Unit.
