Office of the United States Attorney, Ann Birmingham Scheel
District of Arizona
March 20, 2012
TWO SENTENCED TO PRISON FOR MILLION-DOLLAR FRAUD SCHEME
PHOENIX – On March 19, 2012, Joseph Thomas Grooms, 25, of Glendale, Ariz., and Harold Lynn Ruggles, 27, of Phoenix, Ariz., were sentenced by U.S. District Judge Neil V. Wake to 37 and 33 months in federal prison, respectively, for interstate transportation of stolen property. They were also ordered to pay $1,050,000 in restitution to Dell Inc. Grooms pleaded guilty on November 29, 2011, and Ruggles pleaded guilty on January 4, 2012.
According to their plea agreements, Grooms and Ruggles schemed from September, 2009, through January, 2011, to steal computer monitors and other equipment from Dell Inc. by exploiting Dell’s warranty program. Using variations of the name Precision Tech Experts, Grooms and Ruggles posted on eBay offers to sell Dell equipment that they did not possess. Once an eBay buyer purchased the item, Grooms and Ruggles would access Dell’s website, transfer a legitimate owner’s warranty to the eBay buyer, and then make a false claim to Dell for a replacement part. Dell shipped the equipment to the eBay buyer, thinking it was following through on legitimate warranty commitments. The eBay buyer received the new or refurbished equipment directly from Dell, thinking that the equipment was purchased lawfully. The plea agreements state that Grooms and Ruggles received more than $600,000 in proceeds as a result of the scheme.
The investigation in this case was conducted by the U.S. Secret Service and the Round Rock, Texas, Police Department. The prosecution is being handled by Assistant U.S. Attorneys Matthew Devlin, Western District of Texas, and James R. Knapp, District of Arizona.
CASE NUMBER: CR-12-1686-PHX-NVW
RELEASE NUMBER: 2012-070(Grooms&Ruggles)
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/