ERIE, Pa. (AP) -- An Erie businessman has been sentenced to 4½ years in federal prison for a multimillion-dollar fraud that cheated customers of his copy machine business, including schools and churches.
U.S. District Judge Sean McLaughlin imposed the sentence against Frederick Zurn, 58, on Tuesday despite pleas from his family and a priest who characterized him as a committed family man and community member, the Erie Times-News (http://bit.ly/X06fEr) reported Wednesday..
"Fred can do a lot more good outside the prison than inside the prison," the Rev. Michael DeMartinis told the judge.
But Assistant U.S. Attorney Christian Trabold argued that churches were among the biggest victims of Zurn's Erie Copy Products which, the judge said, "functioned as a criminal enterprise rather than a legitimate business ... :"
Zurn had pleaded guilty in July to wire fraud and willful failure to collect or pay over payroll taxes.
Trabold said customers of Zurn's Erie Copy Products paid for leases on copy machines they never received, or which were broken, older or less expensive than they had been told. The scheme cost customers and lenders $2.5 million to $7 million between July 2004 and May 2011. Zurn also failed to remit payroll taxes withheld from his employees for the last three years of the scheme.
Zurn must pay the IRS more than $278,000 and must pay restitution -- in an amount still to be agreed upon by Trabold and Zurn's attorney -- to more than two dozen victims.
Our Lady of Peace Roman Catholic church in nearby Millcreek Township lost $23,000 in the scheme and other churches in Ohio and Pennsylvania contend they were "cheated" or put through a "financial nightmare" by Zurn's business, Trabold said.
Zurn "was leading a double life," Trabold said. "It's disingenuous to say you are a man of faith when you are ripping people off."
Information from: Erie Times-News, http://www.goerie.com