Salzano pleads not guilty to money laundering, conspiracy and theft

By Theresa Schmidt - bio | email

LAKE CHARLES, LA (KPLC) - He's accused of scamming businesses across the country. Now he faces justice in Calcasieu Parish.  Louisiana is the first state to pursue criminal charges in an alleged pyramid-type scheme that allegedly defrauded more than 11,000 businesses around the country out of more than $300 million dollars.

Fifty year old Thomas Salzano from New Jersey was formally processed in and out of the Calcasieu Jail after traveling here to enter pleas of not guilty in State District Court. In January he was indicted on multiple counts of money laundering, conspiracy and theft for allegedly defrauding five local businesses of a total of nearly $100,000.

Thousands of businesses across the country were allegedly victimized in the alleged scheme involving the now bankrupt company, NorVergence, but this is the first time criminal charges have been pursued. The Louisiana Attorney General and the Calcasieu Parish District Attorney are prosecuting. Calcasieu D.A. John DeRosier says, "The 11,000 plus victims around the country and the total amount of money that they have lost through this scheme is in excess of $300 million and nobody was doing anything about it. Now, they come to Calcasieu Parish and that's where we draw the line. We're not afraid to go after a complicated case. I think that it is a legitimate case of fraud."

Assistant Attorney General David Caldwell explains NorVergence would sell victims on the belief that leasing a black box called the matrix would mean big savings on their phone service. "It was a telecommunications scheme where essentially they would go in and promise a small business that they would be able to save them 30% on their long distance service. But all that it was, was a pyramid scheme. And eventually the pyramid collapsed. They were simply financing the business with new customers."

The rental contracts were then allegedly sold to finance companies for quick cash while most of those buying the discounted services got nothing and found themselves stuck owing big bucks to the finance companies or banks. Explains DeRosier, "When they would sell these systems including the services they would immediately transfer the paper to a bank and once they get hold of the commercial paper the obligation is owed to the bank instead of to NorVergence."

Caldwell says it's an example of the kind of corporate greed seen in the banking industry that resulted in federal bailouts. What you had was people who were running around who were unregulated who were doing what they wanted to do. Other states and the Federal Trade Commission have taken civil action against Salzano but Louisiana is the first to pursue a criminal case. While in court Salzano voluntarily surrendered his passport. He has posted $75,000 bond and been released from jail.

We approached Salzano and his attorney in court today but they declined to comment. They are next scheduled to appear October 26th when the court will hear motions in the case.

For more on Thomas Salzano and civil cases involving him click here.