Ex-IBM Salesman Charged With $4.8-Million Fraud

An ex-IBM salesman from Granada Hills has been charged with defrauding the computer giant of $4.8 million by taking cash kickbacks to sell equipment and software for minuscule amounts and then changing company records electronically to hide his actions, authorities said Thursday.

Leon Brooks Brown, 30, faces 40 counts of computer fraud, one charge of grand theft and one charge of conspiracy, the Los Angeles district attorney’s office said. A preliminary hearing in Los Angeles Municipal Court was postponed Thursday until June 9 at the request of Brown’s attorney, said Deputy Dist. Atty. Albert MacKenzie.

In a series of transactions from August, 1990, to July, 1991, he sold accomplices IBM personal computers, software and other equipment for token amounts, then manipulated company records to conceal the discrepancy, court records said.

For example, he sold computers worth $1,000 for $3 each, MacKenzie said. In return, he received cash kickbacks from his accomplices, MacKenzie said.

“We know he received money back from his accomplices, but we don’t know how much cash he received. It’s still under investigation,” MacKenzie said. Because “the current provable loss is in excess of $4.8 million,” Brown probably received a “substantial amount” in kickbacks, he said.

Although no other arrests have been made, MacKenzie said he expects to file charges against Brown’s alleged accomplices, who were not identified.

The fraud was discovered by IBM employees, who then contacted Los Angeles police, MacKenzie said.

IBM officials did not respond to inquiries about Brown’s employment there. MacKenzie said Brown was fired after an investigation by the company.

If convicted of all 42 counts, Brown faces up to 10 years in state prison, MacKenzie said. Brown was in Central Jail in downtown Los Angeles in lieu of $250,000 bail.