A $53,000 cashier's check to buy a 2006 Infiniti SUV. A $33,500 check to pay off a 2004 Cadillac Escalade. Home improvements worth $98,000, complete with a home theater and Sub-Zero appliances. And $400,000 in cash.

These were the tools allegedly used by at least five flooring manufacturers from China to Venezuela to hoist their products onto the shelves of home improvement giant Home Depot.

The cars, cash and renovations detailed in court records allegedly were taken as kickbacks by two former Home Depot flooring buyers, among four fired last summer for violating company policies.

What prosecutors say happened at Atlanta-based Home Depot — the world's second-largest retailer — is an example of the cutthroat nature of gaining what's considered prime real estate in the retail industry: big-box shelf space.

The Home Depot case in Atlanta shows just how far suppliers may go to get it.

"All the big-box stores, in a lot of product categories, increasingly represent a significant segment of the market," said Dan Bello, a professor of marketing at Georgia State University.

"So if manufacturers are not on those shelves, they lose access to that segment of the market."

Conditions ripe for fraud

Getting a product into a big-box retailer like Home Depot could "double the business" of a supplier, said Howard Davidowitz, chairman of Davidowitz & Associates, a national retail consulting and investment banking firm in New York.

"It changes the dynamics of the entire business," Davidowitz said.

With so much at stake, if an employee puts a hand out, it could create the perfect conditions for kickbacks and fraud.

A civil complaint filed Jan. 8 by U.S. Attorney David Nahmias in Atlanta details how the government believes Anthony Tesvich, a former store manager who left Home Depot in 2005, masterminded a scheme to hook up flooring suppliers from China, Taiwan, India, Turkey and Venezuela with Ronald K. Johnston, a tile buyer, and James P. Robinson, a rug buyer.

The court documents name only Johnston and Robinson, although the company said that two other Home Depot headquarters employees were fired last year. Tesvich, also named in the filings, was fired in 2005.

The U.S. Attorney's Office has not accused the former managers of any crimes.

The court record, however, indicates a criminal investigation is pending.

The documents allege that Tesvich, a 19-year Home Depot veteran, may have made millions of dollars by being a middleman between overseas suppliers and Robinson and Johnston.

A product buyer's job is to travel overseas to develop relationships with vendors with lower cost, high-quality products. The buyers determine which products make it to Home Depot's shelves.

Big-money trades?

Prosecutors allege Tesvich organized a scheme that worked like this: After being fired from Home Depot in 2005, Tesvich, a former global product buyer, set up U.S. companies to represent seven foreign flooring manufacturers. Money from his companies, prosecutors say, was used to pay for Robinson's cars and Johnston's home improvements in return for millions of dollars in flooring orders.

Tesvich — possibly without the knowledge of the flooring suppliers — allegedly sent cashier's checks to Robinson for $53,000 to buy a 2006 Infiniti SUV and $33,500 to pay off a 2004 Cadillac Escalade.

Tesvich also allegedly paid for $98,000 in home improvements for Johnston, 16-year Home Depot veteran, according to court documents.

The renovations described in the filings included Sub-Zero appliances, a home gym, a home theater with a 105-inch projection television and a finished basement.

(Johnston's home is now on the market for $839,000. The listing for the six-bedroom, three-car-garage house in Marietta describes it as "a perfect 10, with every upgrade imaginable.")

In addition, prosecutors allege, Venezuelan tile maker Megatrade Corp. wired more than $400,000 to Robinson in exchange for millions of dollars in tile purchases.

Robinson used $275,000 to buy two homes in Gallatin, Tenn., that investigators have placed liens against, plus he handed over $146,000 in cash to agents on Dec. 21, according to court documents.

The investigation involves the Internal Revenue Service, the FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Justice Department.

Justice Department spokesman Patrick Crosby said his agency's policy is to neither confirm nor deny any possible investigation.

He did confirm the government has seized gym equipment from Johnston's former home; two cars and $146,000 in cash from Robinson; and placed liens on Robinson's homes.

Attorneys for the former Home Depot managers declined to comment.

Constant vigilance

Guarding against employees who might take advantage of their position as buyers to enrich themselves requires big-box retailers' constant vigilance.

Some companies go as far as putting advertisements in newspapers and trade publications warning suppliers that violating their codes of ethics (such as lavishing buyers with expensive lunches and gifts) could mean losing big contracts with the stores.

Ron DeFeo, a spokesman for Home Depot, said that since the summer of 2007, the company has changed its gift policy from $50 to "zero tolerance."

He said Home Depot has communicated the new policy to merchandising associates and suppliers through letters, as well as discussing it at internal and supplier meetings.

"Obviously, the policy change was a major step," he said. Home Depot also has been reviewing its product lines, inventory controls and vendor payments, he said.

DeFeo said Home Depot has "terminated" its relationship with some of the companies involved in this case and "is still doing business with others as the investigation continues."

Home Depot also is cooperating with the U.S. Attorney's Office and continuing to "internally investigate."

A strong corporate culture is a major deterrent to taking kickbacks, Joe DeAngelo, Home Depot's chief operating officer, said when the managers were fired.

"It should be a you're-stealing-from-the-family type atmosphere," in which good employees help root out the bad ones, said DeAngelo, who wouldn't comment specifically on this case. DeAngelo now runs HD Supply, a division Home Depot sold last year for $8.5 billion.

Home Depot is a company that has tried to create a strong culture that "bleeds orange," a phrase first used by co-founders Bernie Marcus and Arthur Blank and recently reinvigorated by current Chief Executive Frank Blake.

Being "orange-blooded" has meant "owning" your piece of the store. A salesperson keeps his area clean and well-stocked and offers great customer service. A corporate executive gets the highest-quality inventory for the lowest price and pushes costs lower each year.

A tale from Wal-Mart shows a corporate culture that fosters internal watchdogs can work. In 2006, a former Wal-Mart Stores vice chairman, Tom Coughlin, pleaded guilty to fraud and tax charges, admitting he stole money, gift cards and merchandise from the world's largest retailer. Company lawyers estimated losses at about $500,000.

A Wal-Mart employee reported Coughlin, according to news reports.

Home Depot's DeFeo would not confirm whether employees played a role in the firings of the product buyers, saying only, "We were in the early stages of our internal investigation when we were contacted by the authorities."