Man Pleads Guilty to Defrauding FedEx of More Than $600,000
Memphis, TN – A 32-year-old Canadian man who maintained a lucrative scheme that defrauded FedEx of over half-a-million dollars has pled guilty to mail fraud.
According to statements made in court, between October 2009 and August 2013, Andre Grizzle, through his Pittsburgh, Pennsylvania-based shipping company, LDM International, participated in a scheme to create fraudulent FedEx customer accounts in the names and addresses of legitimate businesses without their consent. FedEx, a private and commercial interstate carrier, then made shipments on these fraudulent accounts.
FedEx allows an individual or business to create a "shipper" account to ship items. The established account is assigned a unique account number, and the account is billed for the shipping services it’s provided. Aware of this, Grizzle utilized U-Ship, an online marketplace for shipping services, to solicit FedEx customers to LDM International. U-Ship provides shippers with the comfort of uploading a listing, indicating what type of freight they have, where it needs to be picked up and delivered, and the size and weight of the shipment. Shipping companies who utilize U-Ship can bid on the listed jobs. The shipper selects the bidder it’s most comfortable with.
Through LDM International, Grizzle placed bids for contracts on U-Ship, offering to ship merchandise at favorable rates. According to the indictment, after receiving the shipping contract, Grizzle would utilize FedEx accounts, which were opened under the name of a legitimate business or a nonexistent business, to ship the merchandise.
As the indictment states, Grizzle, or another party to the scheme, would call FedEx’s customer service center pretending to be a representative of an established business. He would then fraudulently create a new shipping account under the name of the business, and subsequently receive a new account number. Weekly or monthly invoice billing was set up for the account.
Grizzle would use these new shipping accounts to ship packages throughout the country on behalf of himself or customers who contracted with LDM International. He would incur large bills on these accounts and provide fraudulent bank account numbers and/or routing numbers to pay the shipping invoices, according to the indictment.
Unaware that the transaction was fraudulent, FedEx would then send the payment information to its financial institution, and within a few days the payments were charged back to FedEx as fraudulent, according to the indictment. Due to unknowingly providing shipping services under fraudulent accounts, the corporation suffered more than $600,000 in losses.
Today, Grizzle pled guilty to one count of mail fraud. If convicted, he faces up to 20 years in prison and up to a $250,000 fine.
Grizzle is slated to be sentenced on September 24 at 9 a.m. by Judge Sheryl H. Lipman.
This case was investigated by the U.S. Secret Service. Assistant U.S. Attorney David Pritchard is prosecuting the case for the government.
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