Tim Malone, MCSE (805) 445-4847 tim@3tcm.net

Over 30 years of managed expertise in computer technology INDEX


Whatever happened to Kenfil Distribution and Irwin Bransky?


Many companies saw the 1994 Northridge earthquake as a way to "clean up," more than rubble. Previously, indictments against two top executives of a major computer software company on eight counts of mail fraud were handed down as a result of the insurance claim they filed.


Monday, 9 June 1998 at 11AM PT Irwin Bransky, president and chief executive officer with Kenfil Distribution Inc., faces Judge Spencer Letts at the US Federal District Courthouse in Downtown, Los Angeles to determine his fate.


According to Frank Sarcone of Cummins & White, LLP, Judge Spencer Letts may remand the defendant into custody after the plea. Bransky faces a maximum jail sentence of 40 years and fines of over $US2 million.


It was alleged that Kenfil Distribution Inc., which sells computer software to retail giants such as CompUSA, intentionally damaged unsaleable goods in order to recoup mounting losses. In the indictment, Kenfil is accused of moving inventory from an off-site warehouse that was not covered by its insurer, to the company's damaged Northridge facility.


Upon receipt of this product at the facility covered under an earthquake insurance policy, employees were directed to "destroy" the merchandise to appear as if it had been ruined during the temblor.


In addition, Kenfil slapped a $US70 million lawsuit on the insurer which was previously defeated by a summary judgment motion.


"We thought the claim was suspicious for several reasons," says Frank Sarcone, partner of Cummins & White, LLP, the insurance company's counsel. "About the time our suspicions were confirmed through depositions of Kenfil's employees, we were contacted by the FBI, which requested all of the insurance files."


Sarcone continues, "This isn't the end. We believe others are involved. When fraud of this nature goes unchecked or undetected, we all lose."


More on Irwin:


California software distributor Irwin Bransky had a lot of useless merchandise on his hands. So when the Northridge earthquake struck California in 1994, Bransky ordered employees to jump on the software packages and bend them with their hands to inflate an insurance claim. Bransky filed a $5-million claim, and the insurer paid $840,000 before an employee blew the whistle. Bransky received 51 months in prison in 1998.