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Justice News

Department of Justice
U.S. Attorney’s Office
District of Massachusetts

FOR IMMEDIATE RELEASE
Wednesday, September 6, 2017

Georgia Man Sentenced for Defrauding Staples

BOSTON –A Georgia man was sentenced today in federal court in Boston for his involvement in a scheme to defraud Framingham-based Staples, Inc. of more than $1.4 million.

 

John Douglas, 46, of Alpharetta, Ga., was sentenced by U.S. District Court Judge Indira Talwani to 30 months in prison, two year of supervised release, and ordered to pay $691,327 in restitution and $553,061 in forfeiture. On Jan. 24, 2017, Douglas pleaded guilty to conspiracy to commit wire fraud and mail fraud.

 

Douglas and alleged co-conspirator Layne Michael Gosnell 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. They did this by using fictitious names, addresses, contact information, and a computer script to query a Staples website and seek unclaimed customer loyalty rewards for purchases that they 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 one dollar at a time. The conspirators then used the rewards like cash at Staples retail locations to buy merchandise that they often sold on eBay.

 

In addition, Douglas and, allegedly, Gosnell 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.

 

On Aug. 4, 2017, Gosnell was charged in federal court in Boston with conspiracy to commit wire fraud and mail fraud, and is awaiting trial. The details contained in the charging documents are allegations and Gosnell is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

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 prosecuted the case.

Topic(s): 
Financial Fraud
Component(s): 
Updated September 6, 2017