Man Sentenced To More Than 2 Years For Defrauding Staples Out Of $1.4 Million

FRAMINGHAM, MA—A Georgia man was sentenced on Wednesday in federal court in Boston for his involvement in a scheme to defraud Framingham-based Staples out of more than $1.4 million, announced the U.S. Department of Justice.

John Douglas, 46, Alpharetta, GA, was sentenced in U.S. District Court to 30 months in prison, two year of supervised release, and ordered to pay $691,327 in restitution and $553,061 in forfeiture. On Jan. 24, 2017, Douglas pleaded guilty to conspiracy to commit wire fraud and mail fraud, said the release.

Douglas reportedly worked with Layne Michael Gosnell in a complex scheme devised to defraud Staples out of more than $1.4 million worth of customer loyalty rewards and product rebates by creating more than 1,100 Staples rewards accounts. They did this by using fictitious names, addresses, contact information, and a computer script to query a Staples website and seek unclaimed customer loyalty rewards for purchases that they did not make, said the U.S. Department of Justice. The computer script made thousands of queries a day, amassing more than $889,000 worth of rewards in small increments, often less than one dollar at a time. The conspirators then used the rewards like cash at Staples retail locations to buy merchandise that they often sold on eBay.

In addition, Douglas and, allegedly, Gosnell 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.

On Aug. 4, 2017, Gosnell was charged in federal court in Boston with conspiracy to commit wire fraud and mail fraud, and is awaiting trial.

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