Scammers charge small businesses for products never received

MILWAUKEE (WITI) -- A small business scam has seen group of con artists zero in on medical groups or companies with less than 100 employees, charging for items they never sent and counting on no one to notice.

"The company would receive an invoice in the mail, usually for $600 for two cases of latex gloves. The quantity they were saying they were shipping was never sent to the companies," said U.S. Postal Inspector Edward Kljunich. "If the company did pay the first invoice, they would then generate a second invoice for a larger number, larger quantity, larger amount and send that to the company. If they paid that, they would increase it again."

The scammers made a killing. Postal Inspectors say there were over $2.6 million in losses and over 1,000 victims annually.

Experts warn small businesses to thoroughly check out a company before doing business with them.

"Make sure a process is in place so if something comes in, you know what it was and you know what you're paying for, not just sending a payment out for something you don't know you've received or not," said Kljunich.

Two of the three people charged in this case worked out a plea deal -- one for three years behind bars and the other for five years probation. The leader of the scam accidentally drowned two weeks before his trial was set to begin.