Georgia Man Pleads Guilty to Defrauding Staples Inc.
BOSTON – A Georgia man pleaded guilty today in federal court in Boston in connection with a scheme to defraud Framingham-based Staples Inc. of more than $1.4 million.
Layne Michael Gosnell, 46, pleaded guilty to one count of conspiracy to commit wire fraud and mail fraud. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for Jan. 10, 2018.
Gosnell previously pleaded guilty on Sept. 26, 2017, but the Court conducted a second plea hearing today, due to the fact that immediately after the first plea hearing it was determined that Gosnell tested positive for alcohol above the legal limit in Massachusetts.
Gosnell and co-conspirator John Douglas, among others, engaged in a complex scheme to defraud Staples of more than $1.4 million worth of customer loyalty rewards and product rebates by creating more than 1,100 Staples rewards accounts, often using fictitious names, addresses and contact information. Douglas created a computer script to query a Staples website and seek unclaimed customer loyalty rewards for purchases that neither he nor Gosnell made. The computer script made thousands of queries a day, amassing more than $889,000 worth of rewards in small increments, often less than one dollar at a time. Gosnell and Douglas 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. Gosnell sold his share of the fraudulently obtained Staples merchandise on eBay.
Gosnell and Douglas used a similar method to claim more than $527,000 in cash rebates from Staples for products that they did not purchase.
Staples discovered the fraud and referred the matter to federal authorities.
Douglas was sentenced on Sept. 6, 2017 to 30 months in prison and ordered to pay $691,327 in restitution and $553,061 in forfeiture.
The charge of conspiracy to commit wire and mail fraud provides 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. 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.