A Duluth man has pleaded guilty for his role in a scheme to defraud Massachusetts-based Staples Inc. of more than $1.4 million, federal officials said.
Layne Michael Gosnell, 46, appeared in federal court in Boston on Friday in connection with the charge of conspiracy to commit wire fraud and mail fraud, the United States Department of Justice said in a news release.
That was the second time he appeared in court to enter a plea, the DOJ said.
“Immediately after the first plea hearing it was determined that Gosnell tested positive for alcohol above the legal limit in Massachusetts,” according to the release.
Gosnell and co-conspirators devised a way to steal customer loyalty rewards and product rebates by creating more than 1,100 Staples rewards accounts. They used fake names, addresses and contact information, officials said.
According to the release, John Douglas of Alpharetta created a computer script to query a Staples website thousands of times a day, seeking unclaimed customer loyalty rewards for purchases that neither he nor Gosnell made. They amassed more than $889,000 worth of rewards in small increments, often less than one 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, officials said. Gosnell sold his share of the fraudulently obtained Staples merchandise on eBay.
They used a similar method to collect more than $527,000 in cash rebates, the release states.
Staples discovered the fraud and contacted federal authorities.
Douglas was sentenced Sept. 6 to 30 months in prison and ordered to pay $691,327 in restitution and $553,061 in forfeiture.
Gosnell faces no more than 20 years in prison, three years of supervised release and a fine of $250,000, or twice the gross gain or loss from the offense, whichever is greater. He is scheduled for sentencing Jan. 10.
Know what's really going on with crime and public safety in your metro Atlanta community, including breaking news, trial coverage, trends and the latest on unsolved cases. Sign up for the AJC's crime and safety newsletter delivered weekly to your inbox.
In other news:
About the Author
