Cedar Grove Man Indicted on Multimillion Dollar Fraud Charges

A Cedar Grove man who serves as chief financial officer of a vending machine company was arrested this morning by agents of the Federal Bureau of Investigation and Internal Revenue Service on charges he defrauded Pepsi Bottling Group of nearly $3 million in a decade-long scheme, The U.S. Attorney's Office said in a press release.

Joseph Belasco, 62, of Cedar Grove, was indicted Thursday by a federal grand jury of one count of conspiracy to commit mail fraud, five counts of mail fraud and one count of money laundering for his role in an alleged scam that included cooperation from a Pepsi employee and his wife, according to the indictment unsealed today.

Belasco works for Culinary Ventures Vending, a Union Township-based company that places and stocks vending machines in private and commercial facilities, such as state colleges and entertainment venues, the indictment says.

In 1998, Belasco, and an unindicted co-conspirator, created Impact Cause Related Marketing as a subsidiary of Culinary Ventures Vending, the stated purpose of which was to provide Pepsi Bottling Group with leads to customers interested in purchasing cans, bottles and fountain products. In return, Impact Marketing and Belasco would receive commissions as long as the client remained a Pepsi customer, in addition to quarterly rebates based on how much Pepsi product a customer purchased annually.

According to the indictment, Belasco, and a co-conspirator working inside Pepsi, assigned new customers to Impact Marketing, and reassigned existing Pepsi customers to the list of new customers supposedly referred by Impact, which created additional commissions for leads that Belasco did not generate himself.

In the years of the scheme, identified as 1998-2008 in the indictment, Impact Marketing received approximately $2.9 million in commissions and rebates, and paid $1.1 million to the Pepsi insider and his co-conspiring wife in bogus fees for nonexistent consulting work and unearned commissions.

All six charges carry a maximum potential penalty of 20 years in prison and a $250,000 fine. The money laundering charge carries a maximum potential penalty of 20 years in prison and a $500,000 fine.

The indictment also seeks to force Belasco to forfeit approximately $4 million, representing the $2.9 million he received and the $1.1 million paid to his co-conspirators.

Phone calls placed to the Belasco residence and his attorney, John Azzarello, were not immediately returned.

Check back with Patch for updates as they become available.