Alpharetta Couple Admits To Plan To Defraud Staples Of $1.4 Million

BOSTON, MA – A Georgia couple has admitted to their involvement in a scheme to defraud Massachusetts-based Staples of more than $1.4 million.

John Douglas, 46, of Alpharetta, Georgia, pleaded guilty on Jan. 24 to conspiracy to commit wire fraud and mail fraud, the U.S. Attorney's Office for the District of Massachusetts said.

U.S. District Court Judge Indira Talwani has scheduled his sentencing for April 26. Douglas’s wife, Analyn Douglas, 41, entered a deferred prosecution agreement, having admitted her involvement in the conspiracy to ship stolen Staples goods in interstate commerce.

If she abides by the terms of her agreement with the government, the charge against Douglas will be dismissed after one year, the U.S. Attorney's Office added.

The Douglases and others engaged in a complex scheme to defraud Staples of more than $1.4 million worth of customer loyalty rewards and product rebates. Prosecutors contend John Douglas and one of his associates created more than 1,100 Staples rewards accounts, often using fictitious names, addresses and contact information.

According to prosecutors, Douglas then created a computer script to query a Staples website and seek unclaimed customer loyalty rewards for purchases that he did not make. 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.

The Douglases and others 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. Analyn Douglas sold much of the fraudulently obtained Staples merchandise on eBay, the U.S. Attorney's Office said.

In addition, the Douglases used a similar method to claim more than $527,000 in cash rebates from Staples for products that they did not purchase.

Staples, who has cooperated with the government, discovered the fraud and referred the matter for investigation.

The charges of conspiracy to commit wire fraud and mail fraud provide for a sentence of no greater 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.

The charge of conspiracy to ship stolen goods provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000, or twice the gross gain or loss, whichever is greater. Actual sentences for federal crimes are typically less than the maximum penalties.

Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

Assistant U.S. Attorney David J. D'Addio of Weinreb’s Cybercrime Unit is prosecuting the case.

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