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Justice News

Department of Justice
U.S. Attorney’s Office
Middle District of Florida

FOR IMMEDIATE RELEASE
Thursday, April 27, 2017

Jacksonville Man Convicted Of $5 Million Conspiracy And Wire Fraud

Jacksonville, FL – Acting United States Attorney W. Stephen Muldrow announces that a federal jury has found Justin Pennington (30, St. Johns County) guilty of one count of conspiracy and nine counts of wire fraud. He faces up to 20 years in federal prison on each count and mandatory restitution of approximately $5 million. His sentencing hearing has been scheduled for August 2, 2017.

 

According to evidence presented at trial, while Pennington was employed as an Information Technology Director at The Wholesale House, an Ohio-based company with offices in Jacksonville, he and his co-conspirators created a fraudulent company (3 Kings, LLC). 3 Kings was incorporated in Delaware in an attempt to conceal the identity of the owners who purchased products from The Wholesale House at or near cost and then resold those products to consumers and retailers. Unbeknownst to the owners of The Wholesale House, 3 Kings illegally competed with The Wholesale House’s customers and thereby caused significant financial difficulties for the company’s legitimate customers. In all, 3 Kings purchased nearly $40 million of products from The Wholesale House and never paid the entirety of its bills owed to them. Instead, Pennington and his co-conspirators spent tens of thousands of dollars themselves, with Pennington incurring credit card balances of up to $100,000 per month, while owing his employer millions of dollars.

 

During the trial, Pennington’s co-conspirators testified that he was the mastermind of the scheme, created detailed proposals, named the corporation, incorporated the company, and controlled the corporation’s bank accounts. Further The Wholesale House owners testified that they had personally infused more than $7 million into the company to ensure its survival and to protect the jobs of the company’s more than 60 employees.

 

This case was investigated by the Federal Bureau of Investigation (FBI). It was prosecuted by Assistant United States Attorneys Mark Devereaux and Jason Mehta.

Topic(s): 
Financial Fraud
Component(s): 
Updated April 27, 2017