Sylvania man sentenced for fraud plots

8/15/2012

A Sylvania man who pleaded guilty in U.S. District Court in Toledo to conspiracy to commit mail fraud and wire fraud in a scheme involving advertising revenues and golf course beverage carts has been sentenced to federal prison and ordered to make restitution.

Philip A. Cargnino, 48, was sentenced to 18 months at the federal correctional institution in Morgantown, W.Va., and was ordered to pay $2.3 million in restitution to approximately 1,300 small golf courses bilked out of $4,000 to $5,000 each by Cargnino's firm, Royal Links USA Inc., of Springfield Township between 2002 and 2004. Cargnino was sentenced Aug. 2 by Judge Jack Zouhary and has been ordered to surrender by Sept. 7 to begin his term.

Sentencing for Cargnino had been set for March but was delayed after his attorneys argued that the guidelines for his sentencing were too harsh considering that two co-conspirators in the Royal Links crime each got five years' probation and no prison time.

Cargnino's guilty plea agreement had a guideline of five to six years in prison, with a likelihood of three to four years. Instead, he received 18 months followed by three years of probation, plus the restitution.

Cargnino had pleaded guilty to one felony count, and two others felony counts were dismissed.

The Royal Links conviction stems from a 2005 investigation into activities of the firm that Cargnino formed in 2002 with two partners, Daniel W. Sandwisch of Maumee and Robin Flaum of Sylvania, both of whom also were indicted.

Sandwisch and Flaum pleaded guilty in 2010 to one count each of conspiracy to commit mail and wire fraud.

Royal Links marketed nonmotorized golf carts to golf courses to serve as portable concession stands. Under the scheme, golf courses would buy or lease the carts, and all leasing payments for the carts were to be reimbursed by Royal Links through ad revenues from national sponsors who would pay to place advertisements on the cart's panels.

Cargnino claimed to have sponsorship agreements with Kellogg Co., Hershey Foods, Pringles, and others, but Royal Links had no national sponsors and was running a form of Ponzi scheme.

The company covered its expenses through signing up more golf courses.

The scheme collapsed in 2004, with golf courses responsible for lease payments of up to $16,000, or four times each cart's $4,000 construction cost.