Former Systemax Top Exec Asks For Clemency As Sentencing Looms For Fraud, Tax Evasion

Sentencing is looming for a former top-level Systemax executive, Gilbert Fiorentino, who pleaded guilty last month to fraud, tax evasion and admitted to hundreds of thousands of dollars in vendor kickbacks.

In the latest case development, Fiorentino's lawyer, Samuel J. Rabin Jr., is asking for a reduced sentence in wake of good behavior, and revealed a "persistent theme" of substance abuse throughout the executive's past, including during his time at Systemax.

In a letter to the judge, filed Wednesday, Rabin requested an alternate sentence after he accepted responsibility for his crimes, assisted in the prosecution of others, as well as worked to settle debts with Systemax and the IRS. Fiorentino already has paid out an $11 million settlement to Systemax, and has been working with the IRS and SEC to settle tax issues. He said Fiorentino also has shown a history of good conduct, charity work and suffers from health concerns, including a history of substance abuse.

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"His acceptance of responsibility has been immediate and complete. His remorse is both sincere and profound. During the past four years, Mr. Fiorentino has tried to resolve his financial liability in this case. It has been costly, financially, physically and emotionally, and has greatly affected Mr. Fiorentino's health," the letter read.

In the letter, Rabin said Fiorentino suffered from a "long and extensive history of substance abuse," including alcohol, prescription medications and sleep aids. The addiction began in law school as a means to relieve stress, and by 2005, he was drinking at least eight bottles of alcohol a week. The drinking continued through the founding of TigerDirect and his 2011 resignation from Systemax, according to the letter.

Rabin asked in the letter that Fiorentino be considered for a substance abuse program in prison, as he has never received treatment for his addiction.

Systemax, which is No. 19 on CRN's 2014 SP500 list, declined to comment on the news.

Gilbert Fiorentino and his brother, Carl Fiorentino, started TigerDirect in 1987 and sold it to Systemax in 1995. Gilbert was director of Systemax and CEO of its Technology Product Group. Carl was president of TigerDirect.

Last November, the two brothers were charged with accepting more than $9 million in kickbacks, in exchange for steering millions of dollars of business from the solution provider to certain vendors. The Federal Bureau of Investigation also accused the pair of tax evasion on that income.

On top of that, the FBI charged that Gilbert had also accepted thousands of dollars in cash payments, gold coins worth more than $150,000, other goods, as well as misappropriating company funds. It said that his brother Carl had also accepted millions of dollars from a supplier, as well as millions in funds to pay for and decorate his Florida residence.

"Gilbert and Carl Fiorentino put their financial gain and lavish lifestyle ahead of their responsibilities as corporate officers and directors. They accepted kickbacks, driving up the price of the consumer electronics and passing the price increase to customers. The Fiorentinos took advantage of their positions of trust," U.S. Attorney for the Southern District of Florida Wilfredo Ferrer said in a statement at the time.

The two pleaded guilty in early December, and are scheduled to be sentenced this month.