MARTIN VELLOZZI, age 56, of Rancho Palos Verdes, California, pleaded guilty as charged today before U.S. District Judge Susie Morgan to one-count Bill of Information charging him with mail fraud for his role in creating and selling non-authentic Merceds-Benz diagnostic equipment, announced U.S. Attorney Dana J. Boente.
According to the court documents, VELLOZZI owned LMV Industries, a California-based company that offered technical information and support for Mercedes-Benz automobiles. Between about 2005 and July 2012, VELLOZZI also produced and sold unauthorized and non-authentic versions of the Mercedes-Benz Star Diagnostic System (SDS), a hand-held computer containing proprietary, confidential software. Such diagnostic devices are used by mechanics to identify problems with and assure the safety of motor vehicles employing electronic control systems. By selling non-authentic, unauthorized SDS that bore Mercedes-Benz logos and trademarks, VELLOZZI mislead purchasers into thinking that the equipment he was selling was authentic and authorized by Daimler AG, when, in fact, they were not.
Furthermore, according to court documents, the “real" SDS sold for between $8,300 and $22,000 each; VELLOZZI sold the non-authentic SDS, which contained Mercedes-Benz logos and trademarks, for approximately $6,000. VELLOZZI worked with a company in Durham, North Carolina and a company in Harahan, Louisiana to manufacture, sell, and repair the “fake" SDS, which were then sent through commercial interstate carrier, including Federal Express and the United Parcel Service, to the purchasers. On some occasions, when one of the fake SDS units VELLOZZI sold would break, the Harahan-based company would provide fixes or “patches" either to VELLOZZI or directly to the customer. VELLOZZI also used cracking software, called “keygens" to “unlock" SDS software, override Mercedes-Benz’s security protections, and make the software (and software updates) work on his unauthorized SDS. In total, VELLOZZI sold approximately ninety-five (95) non-authentic SDS, at approximately $6,000 each.
VELLOZZI faces a maximum term of imprisonment of 20 years, followed by up to 3 years of supervised release, and a $250,000 fine. Sentencing is scheduled for Nov. 20, 2013 at 2:00 pm.
This case is being investigated by agents from the Federal Bureau of Investigation. The prosecution of this case is being handled by Assistant United States Attorney Jordan Ginsberg.
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Source: U.S. Department of Justice, Office of the United States Attorneys
