News and Press Releases

Brothers Plead Guilty to Defrauding Banks and Merchants of over $5 Million in Counterfeit Check/Credit Card Conspiracy

FOR IMMEDIATE RELEASE
February 22, 2011

Reno, Nev. – Former Incline Village residents Darin Jerome French and Jennifer Lynn French were convicted by a federal jury on Friday of mail fraud, wire fraud, and money laundering for an internet scheme in which the victims bought and paid for high-end appliances they never received, announced Daniel G. Bogden, United States Attorney for the District of Nevada.

Following a nine-day trial, Darin French, 39, currently in federal custody, was convicted of 22 counts of mail fraud, 11 counts of wire fraud and three counts of money laundering.

Jennifer French, 38, of Susanville, California, was convicted of 14 counts of mail fraud, six counts of wire fraud, and two counts of money laundering. They were indicted in January 2008.

During 2003 to 2004, Darin and Jennifer French resided in Incline Village, Nevada. They established a website called "Look What We Got" (LWWG), and advertised high-end kitchen appliances such as Thermador, Sub Zero, Viking, and Wolf, for sale on E-Bay. The defendants represented that they were dealers of the appliances and that LWWG carried full lines of high end appliances at discount prices. In fact, the defendants were never authorized dealers of the appliances and they did not have contracts with the manufacturers or distributors to distribute such merchandise.

To effect the fraud scheme, Darin and Jennifer French established false customer feedback records on E-Bay by selling low-cost merchandise. They also used a tactic known as "shill feedback" in which they established multiple user ids and left positive feedback for themselves in the guise of other legitimate buyers and sellers. When customers found items they wished to purchase, they were sent an e-mail asking them to call LWWG directly for price quotes. Customers thought they were purchasing products through E-Bay and were still protected by E-Bays consumer protection policies, when in-fact, they were off-site purchases.

Customers sent payment to the defendants, via credit card, cashier's check, or personal check. After providing merchandise to a few initial customers, the defendants thereafter failed to deliver any other merchandise to individuals who had ordered and paid for the appliances. The defendants cashed the checks or charged the customer's credit card, but did not deliver the merchandise. Customers who questioned the defendants about not receiving their merchandise, were advised by "Jennifer" at LWWG that a new supplier had increased their prices, and that in order to satisfy the client they were cancelling the order and issuing a refund. Instead of refunding clients' money, the defendants transferred money in large increments out of the LWWG bank account to their personal account and purchased luxury items, including a $50,880 Bayliner boat and a Ford F250 pickup truck, and diverted approximately $40,000 to an E-Trade stock trading account. The defendants also used their clients' money to purchase another business that they continued to run after they closed LWWG.

As a result of the scheme, about 80 individual victims were defrauded of approximately $1.5 million. The credit card companies refunded approximately $1.2 million to the individual victims. The victims who mailed personal checks or cashier's checks to the defendants lost approximately $336,000.

In February 2009, Darin French was also convicted in a separate federal case of wire fraud and sentenced to 30 months in prison. In that case, French submitted false claims to Maytag claiming warranty work had been performed by his company when in fact no such work had been performed.

Darin French and Jennifer French are scheduled to be sentenced by U.S. District Judge Larry R. Hicks on May 23, 2011.

They face up to 20 years in prison and up to $250,000 in fines on each count.

The case was investigated by the United States Postal Inspection Service and the FBI, and prosecuted by Assistant United States Attorneys Megan Rachow and Bill Reed.

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