Littleton Woman Sentenced For Selling Fraudulently Obtained Items on eBay And Not Declaring Income With The IRS
DENVER – United States Attorney Jason R. Dunn today announced that Kristin Martin, age 39, of Littleton, Colorado, was sentenced to serve 33 months in federal prison followed by 3 years of supervised release for mail fraud and tax evasion related to selling fraudulently obtained items on eBay. Martin was also ordered to pay $872,337.68 in restitution for the fraud to her former employer and $161,864 to the IRS for the tax evasion.
The Denver Division of the FBI, the IRS—Criminal Investigation, and the United States Postal Inspection Service joined in this announcement.
According to the information and the stipulated facts contained in the plea agreement, Martin worked as an executive assistant for her employer. She was provided with a unique identification and password to purchase supplies from Staples. Her company used various cost centers to track internal expenses, and ordinarily an employee could only designate the cost center affiliated with the specific department they worked in when ordering items through the Staples website. However, if an employee transferred positions or responsibilities, the employee obtained access to a new cost center without losing access to the prior assignment’s cost center.
Between January 2013 and December 2016, Martin used her identification and password to fraudulently order unauthorized items such as I-Pads, Apple TVs, Kindles, and other items which she kept and then resold on eBay for her own profit. These fraudulent purchases caused a loss of $864,441.11 to her employer. Martin was able to facilitate this scheme by intentionally assigning the fraudulent purchases to 23 different cost centers so each one would be less likely to notice the fraudulent charges. Martin also used her company’s Federal Express account to ship the fraudulently purchased items to her buyers.
Over the course of this scheme, Martin received at least $571,725.61 from the resale of the fraudulently ordered items. Martin did not provide her personal accountant with information regarding the online sales until she received a notice of additional income from the IRS. At that time, she provided her accountant false information regarding the cost of goods sold and other expenses she did not incur in order to significantly reduce her income tax liability. Based on this false information, her accountant then prepared a false and fraudulent 2014 amended tax return that was filed with the IRS.
“Ms. Martin not only stole from her employer, she stole from all of us as taxpayers” said U.S. Attorney Jason Dunn. “Thanks to the FBI, IRS-CI, USPIS and the team in my office, she was caught and will now have time in a federal prison to contemplate the harm that this type of behavior does.”
“Even when confronted with additional income generated from her theft, Kristen Martin chose to falsify information to limit her tax liability at the expense of American taxpayers,” said IRS-Criminal Investigation Special Agent in Charge Andy Tsui. “Now Martin will reap the reward of defrauding her employer and the public by serving time in prison.”
“Ms. Martin's sentencing should illustrate the FBI and our partners will aggressively investigate those criminals who take advantage of unsuspecting victims in order to enrich themselves,” said FBI Denver Special Agent in Charge Michael Schneider. “We are thankful to our partners at the U.S. Attorney's Office, Internal Revenue Service, and USPIS for their diligence and hard work in this investigation.”
“This is a great example of a joint investigation in which the financial footprint of this defendant bore an opportunity for multiple federal law enforcement agencies to bring their collective investigative strengths together for a successful prosecution,” said Ruth M. Mendonça, U.S. Postal Inspector in Charge of the Denver Division. “Postal Inspectors have been investigating mail fraud since the law’s inception in 1872, and we will never relent in our search for justice for fraud victims,” Mendonça said.
This case was investigated by Internal Revenue Service – Criminal Investigation, the Denver Division of the FBI, and the United States Postal Inspection Service. The case was prosecuted by Assistant United States Attorney Pegeen Rhyne.
The sentence was pronounced by U.S. District Court Judge Christine M. Arguello. Martin was charged by Information on January 14, 2020, and pleaded guilty to the charges on March 5, 2020.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the District of Colorado. Related court documents can be found on PACER by searching for Case Number 20-cr-0016.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.