Alpharetta couple defraud company of $1.4 million, sometimes a dollar at a time

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An Alpharetta couple has admitted helping to defraud office supply company Staples of more than $1.4 million in a complex scheme involving customer loyalty rewards and rebates.

John Douglas and a conspirator created more than 1,100 fake customer loyalty accounts using fictitious names, then John created a computer program to claim rewards for purchases they did not make, according to the U.S. Attorney’s Office in Massachusetts, where the case was prosecuted.

“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 U.S. Attorney’s Office said.staples

Douglas and his wife, Analyn, along with others, then used the rewards to obtain merchandise from Staples. The couple stored the merchandise in their Alpharetta home and in two public storage facilities, until selling it on eBay using a store Analyn controlled, according to the criminal complaint.

The couple and an associate used a similar method to claim more than $527,000 in cash rebates from Staples for products that they did not purchase.

John Douglas, 46, pleaded guilty last week to conspiracy to commit wire fraud and mail fraud.  He is scheduled to be sentenced April 26 and could face up to 20 years in prison.

Analyn Douglass, 41, was given a deferred prosecution agreement after admitting to her involvement in the conspiracy to ship stolen Staples goods through interstate commerce. If she complies with the agreement, the charge against her will be dropped in a year.

Staples detected the fraud based on the high-volume of rewards-related internet traffic from John Douglas’ IP address in Alpharetta, court records say.

The company wasn’t the only victim, court documents show. Legitimate customers of Staples were unable to claim their rewards or rebates if Douglas or a co-conspirator already had claimed them.

In a news release on the pleas, prosecutors didn’t identify others said to be involved in the conspiracy. Court records said there was at least one other conspirator whose identity is known to prosecutors. The main role for that unindicted co-conspirator was redeeming the rewards for Staples merchandise, court records say. Sales from that person’s eBay store during the time of the conspiracy totaled more than $184,000, the records say.

 


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