Charlotte Man Sentenced To More Than Three Years In Connection With Fraudulent Shipping Services Scheme
CHARLOTTE, N.C. – Today, Ernest Keith. 51, of Charlotte, was sentenced by U.S. District Judge Max O. Cogburn, Jr. to 41 months in prison and two years of supervised release in connection with a fraudulent shipping services scheme, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. Judge Cogburn also ordered the defendant to pay restitution totaling $721,707.37.
David M. McGinnis, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service, joins U.S. Attorney Murray in making today’s announcement.
According to filed documents and statements made in court, Keith executed a mail fraud scheme that defrauded FedEx Corporation (“FedEx”) and individuals throughout the United States, by purportedly offering shipping services to customers at reduced prices. Court records show that, from February 2012 to March 2016, Keith used multiple addresses in and around Charlotte to create FedEx Freight shipping accounts for various sham companies. Keith then solicited customers via the internet, and induced them to use his purported shipping services at a reduced cost. Customers paid Keith for the purported shipping services via various money transmitting services, including but not limited to, Western Union, Moneygram, and Paypal. Using the fraudulent FedEx Freight accounts he had created for his sham companies, Keith arranged to have the customers’ shipments picked up by FedEx, but instead of paying FedEx for their shipping services, Keith kept the customers’ money.
Court records show that when FedEx began holding shipments it identified as associated with Keith’s sham companies, Keith purported to make payments via telephone, which were later rejected by the bank due to insufficient funds. Court records show that, after Keith’s scheme began to unravel and he was no longer able to use companies, accounts, or addresses associated with him, Keith fraudulently arranged shipments using the name and/or billing address of an existing FedEx Freight customer, which had no affiliation with Keith or the shipper, resulting in the invoices being erroneously sent to that unaffiliated company.
Court records show that Keith induced approximately 200 individuals to use his purported shipping services to arrange for more than 390 shipments. Keith also used more than 20 different FedEx accounts he created to facilitate his shipping services scheme, as well as multiple accounts associated with unrelated third parties, resulting in a loss of more than $680,000.
Keith is currently in custody and will be transferred to the custody of the federal Bureau of Prisons to begin serving his sentence upon designation of a federal facility. All federal sentences are served without the possibility of parole.
In making today’s announcement, U.S. Attorney Murray thanks USPIS for their investigation of this case.
Assistant United States Attorneys Jenny G. Sugar and Maria Vento, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
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