Two Georgia men defrauded Staples of more than $1.4 million, feds say

A Georgia man was sentenced in a Boston federal court Wednesday for his role in an expansive scheme to defraud the office-supply store Staples of more than $1.4 million, the Department of Justice announced in a release.

Layne Gosnell and a co-conspirator, John Douglas, both of metro-Atlanta, were accused of engaging in a "complex scheme" to defraud Staples by creating more than 1,100 rewards accounts and claiming hundreds of thousands of dollars worth of rebates for products they did not buy, police say.

Douglas allegedly created a computer script that would routinely scan the Staples website and find unclaimed customer loyalty rewards for purchases neither man made. The script would make thousands of queries a day and eventually reaped more than $889,000 worth of rewards, often in small amounts such as a dollar or less, police said.

The two men then used the rewards to purchase merchandise at Staples stores across the southern U.S. and all along the eastern seaboard, police say. Gosnell would then allegedly turn around and sell the merchandise on eBay.

The two were also said to use a "similar method" to claim another $527,000 in rebates for products they did not purchase.

The Department of Justice said that when Staples discovered the scheme, they reported it to the government and cooperated in the investigation.

Gosnell, 46, was sentenced to 21 months in prison, three years of supervised release, and ordered to pay nearly a million dollars in forfeiture and restitution. He pleaded guilty to conspiracy to commit wire and mail fraud.

Douglas was sentenced on Sept. 6, 2017 to serve 30 months in prison, two years of supervised release, and more than $1 million in restitution and forfeiture. He pleaded guilty to conspiracy to commit wire and mail fraud on Jan. 24, 2017, police say.

Douglas' wife, who had been implicated in the scheme as well, entered into a deferred prosecution agreement and will have her own charge dismissed after one year if she abides by that agreement, authorities said.

This story was originally published January 11, 2018 at 7:55 AM with the headline "Two Georgia men defrauded Staples of more than $1.4 million, feds say."