If you were faced with up to 20 years in federal prison, and hundreds of thousands of dollars in forfeiture and restitution, you might be tempted to drown your sorrows a bit before resigning yourself to your fate.
It’s just probably not a good idea to do it right before your plea hearing.
46-year-old Layne Michael Gosnell of Duluth, Georgia has pleaded guilty for his part in a scheme to defraud Staples, by stealing more than $1.4 million of other customers’ Staples Rewards and rebates. His plea on Friday was actually his second attempt to accept responsibility for his crime. The first time he pleaded guilty last month – he was a little impaired.
On September 26th, immediately after Gosnell pleaded guilty to charges of conspiracy to commit wire fraud and mail fraud, probation officers gave him a breathalyzer test, and found that his blood alcohol level exceeded the legal limit. While Gosnell insisted his pre-court refreshments did not impact his decision to plead guilty, the judge threw out his plea and rescheduled it – just to be safe.
At any rate, if you’ve ever earned Staples rewards or rebates that somehow vanished before you could claim them, then hearing what Gosnell and his co-conspirators did just might drive you to drink.
Federal prosecutors say Gosnell worked with husband-and-wife team John and Analyn Douglas of Alpharetta, Georgia, to claim other customers’ rewards and rebates as their own, which they then used to buy products at Staples office supply stores, and sell them online.
They did this through a computer script that John Douglas devised.
During a 20-month period beginning in January 2014, prosecutors say Douglas’ program generated thousands of 17-digit numbers a day and automatically entered them, one by one, on Staples’ website. Why 17 digits? That’s how long Staples Rewards code numbers are, printed at the bottom of Staples receipts. If you enter that number online, you can earn up to 5% cash back on your Staples purchase.
Unless someone else uses your number before you do.
Any time Douglas’ program created a number associated with an unclaimed reward, he would snag it, diverting it to one of the more than 1,100 fraudulent Staples Rewards accounts that he and Gosnell had created. In order to open those accounts, Gosnell created hundreds of dummy email addresses using free email providers like Hotmail, Yahoo and Gmail, while Douglas went so far as to purchase several internet domain names for the sole purpose of creating email addresses to use in opening Staples Rewards accounts. While Douglas kept many of the rewards for himself and his wife, Gosnell paid Douglas “a small daily fee” to deposit rewards into the accounts that Gosnell had created.
Some of the rewards that the men stole were worth less than a dollar, and the rightful recipients may never have missed them. But those dollars and cents really added up. The fraudsters ultimately ended up with more than $889,000 worth of Rewards. They used their illicit earnings to buy high-value items like computer hard drives, ink cartridges and media streaming devices, which Gosnell and Analyn Douglas sold on eBay.
That all came to an end when Staples closed the fraudulent Rewards accounts. Undeterred, though, Douglas put his program to work on an even easier way to earn cash.
Prosecutors say Douglas and Gosnell turned their attention to Staples Easy Rebates. Unlike Rewards, which are credits for future purchases, Easy Rebates are just plain cash. Douglas modified his program to generate Easy Rebates codes and enter them on Staples’ website. When he found unclaimed rebates, he’d have checks mailed to him, to Gosnell, or to one of dozens of post office boxes that Douglas rented under various names.
That scheme netted Gosnell and the Douglases more than $527,000. Together with the $889,000 in rewards they stole, they ended up with more than $1.4 million.
Douglas was sentenced last month to 30 months in prison and two years of supervised release, and ordered to pay $691,327 in restitution and $553,061 in forfeiture. Earlier, his wife Analyn entered a deferred prosecution agreement, in which a charge of conspiracy to ship stolen goods in interstate commerce will be dismissed if she stays out of trouble for a year.
Prosecutors are recommending that Gosnell be sentenced for a prison term “at the low end” of the federal sentencing guideline range. That means he’s unlikely to serve the maximum possible 20 years, but he is likely to do some time. They’re also recommending a restitution order of $443,913.59.
You might not blame Gosnell if he needs a little liquid courage to face up to that kind of punishment. His sentencing date isn’t until January 10th – so just as long as he gets it out of his system before then.
