Dec. 3, 2009
HOUSTON BUSINESS OWNER PLEADS GUILTY TO INTERNET HOT TUB SCAM
(HOUSTON) – The former owner of a Houston area company that sold hot tubs on Ebay has pleaded guilty to defrauding 46 customers of $191,000, United States Attorney Tim Johnson announced today.
Steve Todd Lanni, 48, of Houston, appeared before U.S. District Judge Keith Ellison this morning. He pleaded guilty to wire fraud - admitting he stole more than $191,000 from customers of his company, Factory Direct Spas. Through his company, then located in west Houston near Interstate 10 and Beltway 8, Lanni sold hot tubs on Ebay to customers throughout the United States and in Europe.
Lanni began selling hot tubs on Ebay in 2004. At that time, Lanni purchased hot tubs from a manufacturer in another state. However, in early 2005, Lanni stopped purchasing hot tubs and began making hot tubs in a warehouse in Houston. He advertised hot tubs on Ebay at 50% to 70% below retail value. Customers were required to wire payment in advance to his bank account or to send a cashier’s check, money order or personal check by overnight delivery before production on the hot tub would begin and promised customers the hot tubs would be delivered in six to eight weeks.
However, after the six to eight weeks, Lanni not only did not deliver the hot tub as promised, he lied to customers using a variety of excuses for not delivering the hot tubs, including telling customers that Hurricanes Katrina and Rita caused an interruption of his business. Instead, Lanni used the money wired by his customers to pay for a lavish lifestyle, including trips to Hawaii, London, Miami, Las Vegas and Canada, for visits to strip clubs and for expensive cigars, expensive clothing, massages and dining at expensive Houston restaurants, spending up to $300 per day for dinner.
The investigation leading to the charges was prompted by customer complaints to the Houston Police Department and the Internet Crimes Complaint Center and was conducted jointly with the FBI/Houston Area Cybercrimes Task Force and the United States Postal Inspection Service.
Lanni faces up to 20 years imprisonment and a fine not to exceed $250,000 and three years supervised release for the wire fraud conviction.
Pursuant to the plea agreement, Lanni agreed to pay restitution to his customers. Lanni has been ordered released on bond pending sentence set for Feb. 23, 2010.
Assistant United States Attorney Vernon Lewis is prosecuting the case.
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