Georgia Couple Admits to Scheme to Defraud Staples
BOSTON –A Georgia couple appeared in U.S. District Court in Boston today to admit their involvement in a scheme to defraud Framingham-based Staples, Inc. of more than $1.4 million.
John Douglas, 46, of Alpharetta, Georgia, pleaded guilty to conspiracy to commit wire fraud and mail fraud. U.S. District Court Judge Indira Talwani scheduled his sentencing for April 26, 2017. John Douglas’s wife, Analyn Douglass [sic], 41, entered a deferred prosecution agreement, having admitted her involvement in the conspiracy to ship stolen Staples goods in interstate commerce. If Douglass abides by the terms of her agreement with the government, the charge against her will be dismissed after one year.
The Douglases and others engaged in a complex scheme to defraud Staples of more than $1.4 million worth of customer loyalty rewards and product rebates. John Douglas and one of his associates created more than 1,100 Staples rewards accounts, often using fictitious names, addresses, and contact information. He then created a computer script to query a Staples website and seek unclaimed customer loyalty rewards for purchases that he did not make. The computer script made thousands of queries a day, amassing more than $889,000 worth of rewards in small increments, often less than a dollar at a time. The Douglases and others then used the rewards like cash to buy merchandise at Staples retail locations throughout the southern United States and along the eastern seaboard, as far north as Massachusetts. Analyn Douglass sold much of the fraudulently obtained Staples merchandise on eBay.
In addition, the Douglases used a similar method to claim more than $527,000 in cash rebates from Staples for products that they did not purchase.
Staples, who has cooperated with the government, discovered the fraud and referred the matter for investigation.
The charges of conspiracy to commit wire fraud and mail fraud provide for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss from the offense, whichever is greater. The charge of conspiracy to ship stolen goods provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000, or twice the gross gain or loss, whichever is greater. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. Assistant U.S. Attorney David J. D'Addio of Weinreb’s Cybercrime Unit is prosecuting the case.