A Georgia man, Layne Michael Gosnell, was charged today in federal court in Boston in connection with a scheme to defraud Framingham-based Staples, Inc. of more than USD1.4 million.
Gosnell, 46, of Duluth, Georgia, was charged with conspiracy to commit wire fraud and mail fraud.
According to the charging documents, Gosnell, John Douglas, and other co-conspirators engaged in a complex scheme to defraud Staples of more than USD1.4 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 a 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.
It is further alleged that Layne Michael 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.
In January 2017, Douglas pleaded guilty to his role in the scheme and is scheduled to be sentenced on Aug. 25, 2017.
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 USD250,000 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.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.