Illinois Couple Swindles Best Buy Out Of $31 Million

The Chicago Tribune says that Russell Cole calls his $2.75 million Deerfield, IL home “the house that Best Buy built,” but now investigators are claiming that the Best Buy money was obtained through fraud.

The Trib says:

Missing from the Kenmore Avenue property are the Ferrari coupe, Lamborghini convertible and a collection of nine other luxury and high-performance vehicles worth about $2.8 million that federal agents seized in November and December.

An investigation by the Internal Revenue Service, FBI and U.S. Postal Service that triggered the seizure was spurred by a “multiyear, multimillion-dollar online bid-rigging scheme,” according to the documents.

Abby Cole, Russell Cole’s wife started a computer chip supply business in the basement of her home in Arlington Heights in 1988. The business took off, and through 2003-2007 the Coles reported about $15.5 million on their income taxes.

Now investigators say that $14.2 million of that income was from fraud.

The scheme worked like this, Chip Factory, the Cole’s company, would submit winning low bids to Best Buy, but then later charged a much higher price. Objections from Best Buy were quieted with gifts to employees.

In one example outlined in the documents, Chip Factory won a bid for 20 computer parts at $42 per part, while the next lowest bid was $72. Chip Factory later charged Best Buy $571 per part, according to documents.

The Coles have not been charged with a crime, but their fleet of sports cars have been confiscated.

Deerfield couple swindled $31 million from Best Buy, federal court documents say [Chicago Tribune]
(Tribune photo by David Trotman-Wilkins / February 17, 2009)

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  1. jstonemo says:

    At least they reported the income on their taxes. LOL

  2. LegoMan322 says:

    Awwww. I know that stealing is bad, but some reason I like. ::claps::

  3. SirNotAppearing says:

    Nothing says “classy” like a faux finish on a McMansion.

    • SirNotAppearing says:

      @SirNotAppearing: Oh, and committing fraud. That’s classy too.

    • Blueskylaw says:

      @SirNotAppearing:

      That’s Fox, not Faux. :-)

    • Emperor_GitEmSteveDave says:

      @SirNotAppearing: except on two walls. Wha??

    • picardia says:

      @SirNotAppearing: @MarleneMops: Actually, grossly deceptive bidding and hush money is not the way business works, unless your interpretation of “the way business works” is remarkably like those currently doing 7-10 in Club Fed.

      • admiral_stabbin says:

        @picardia: 7-10 days? I think that’s about the average stay for white collar crimes. ;-)

      • bohemian says:

        @picardia: I find this story very interesting.
        A company I was involved with in Mpls. used an ad agency that had many former Best Buy Corporate employees on staff. The agency routinely submitted invoices for work that were 4x what other similar or bigger name agencies in town were charging for the same work. I complained about this as was ignored. Someone else who worked there informed me that a number of employees were very sure that the person at our company that signed off was getting significant kickbacks of money from the ad agency for this big dollar highly inflated invoices.

        This makes me wonder if this kind of crooked business practice is fairly common.

    • Sam I Am says:

      @SirNotAppearing: I thought the term “McMansion” referred to homes that were massed produced in an assembly line fashion (like McDonald’s), and were typically in neighborhoods full of similar looking houses. How do you know this house was built that way? I see people calling large homes McMansions on here a lot and wonder if they really know the details of the house. It could just be a large home. This is a serious question by the way. Is my definition of McMansion incorrect?

      • GearheadGeek says:

        @MurdockLuniz: I’d say that a large part of your definition is correct… the main thing is “neighborhoods full of similar-looking houses” and usually a “semi-custom” builder at best. Those builders often CALL themselves custom-home builders, but build from a set of predrawn plans more often than not and just do “options” like gaudy fixtures and fake-french-country kitchens… whatever their customers have seen in recent issues of “Architectural” Digest (which is an interior design magazine and should be sued for false advertising in its title.)

      • Eyebrows McGee (now with double the baby!) says:

        @MurdockLuniz: This is a McMansion. There is an ABSOLUTE RASH of these in Deerfield, Northbrook, Glenview — they all come from the same couple of builders/developers, they’re built of cheap, crappy materials, and they absolutely destroy the look of these postwar neighborhoods. These guys are tearing out the SOUL of these suburbs, and these are older suburban communities that actually HAVE souls. (Deerfield, like Northbrook and Glenview, is on the Chicago Northwestern train line, so these towns have been there since the train.)

        I hate them with the fire of a thousand suns. It makes my soul throw up a little when I go visit my parents and see these monstrosities.

  4. qcgallus says:

    When I worked at Best Buy they would do the same thing every day to customers (especially on Sundays), just in lower dollar amounts, and as a result of working there I won’t shop there when I don’t have to. Therefore to read that it happened against them, I couldn’t care less. Actually I could. I want to buy Russel Cole a beer. Or 12.

    • XianZhuXuande says:

      @qcgallus: How exactly did they do this? Somehow I can see another store or team-unique story coming which doesn’t represent the company. Regardless, promoting theft like this is just irresponsible and childish.

      • RedwoodFlyer says:

        @DoubleEcho: Beat me to it!

      • Charmander says:

        @XianZhuXuande: Read the article to find out.

      • Karita says:

        @XianZhuXuande: They got in trouble here in CT for something similar. The web site you accessed at home would show one price, but when you went to the store, the item you wanted was a higher price. You would ask for the internet price, and the employee would go online to confirm that it was cheaper on bestbuy.com. Then he would say you must be mistaken, as the web site shows the same price as the store price. What you didn’t know was that Best Buy had their own internal web site that was exactly the same as the one you saw at home, but with higher prices. I remember the AG made a huge deal about it.

  5. Kogenta says:

    You’d think that after getting swindled the first couple of times, they would have just ignored bids from these people.

    I suppose though that if they were all small orders, I could see how it could be overlooked or hidden and not made it’s way properly though the chain or command.

    I wonder what sort of “gifts” quiet up a $10k billing discrepency (based on the example given)?

  6. DoubleEcho says:

    “Chip Factory won a bid for 20 computer parts at $42 per part, while the next lowest bid was $72. Chip Factory later charged Best Buy $571 per part, according to documents.”

    Hey, that’s almost like setting one low price on your external website, and then changing the price on your internal, in-store website.

    Oh wait…

  7. Tito151 says:

    While at first, I was thinking ‘Good, anyone who can stick it to BestBuy is good in my book.’ but then further thinking just leads me to believe they just pass this right onto the consumers.

  8. nataku8_e30 says:

    How is this any different than the cost plus contracts that the US government gives out all the time?

    • Blueskylaw says:

      @nataku83:

      Best Buy spends hundreds, the government spends tens of thousands.
      Like the $50,000+ coffee maker that would survive a jet crash. Where they planning on re-using it?

      • nataku8_e30 says:

        @Blueskylaw: Actually, having worked at Sikorsky, the reason something like that might exist is so that it doesn’t turn into shrapnel and kill everyone inside the aircraft in the event of a crash. Of course, I have no idea what specific example you’re talking about, but I don’t really have a problem with expensive equipment certified for flight. What I have a problem with is giving a contract to the lowest bidder without any actual expectation that they’re going to come in anywhere near their estimate. You’re basically rewarding the biggest liar. It looks like it worked really well with the Lockheed / MV Augusta presidential helicopter replacement…

        • Tiber says:

          @nataku83: I have a much cheaper alternative then: don’t have a coffee maker in an aircraft! Congratulations to me, I just saved the government 50K on a coffee make. Hey Obama, you said you want to halve the deficit; got an open cabinet position for me?

          • nataku8_e30 says:

            @Tiber: Trust me, if the government contract didn’t request a coffee maker, no one would have put one in. The testing and certification process is miserable enough for everyone involved to where engineers and management aren’t going to put it in there unless its part of the contract requirement. Again, I think that the acquisitions guys on the government side could probably use a little more common sense.

            • LiquidGravity says:

              @nataku83: I’m just imagining Vin Diesel telling everyone what he wants a coffee maker in the aircraft like he does about the weapons in the Pontiac GTO in the movie xXx.

          • Hyman Decent says:

            @Tiber: Some military flights last for hours on end. I imagine that if servicemen and women are deprived of all amenities on such flights, it’s harder to convince them to reenlist.

            • RedwoodFlyer says:

              @Hyman Decent:

              Taster’s Choice?
              Doesn’t Charbucks have some instant stuff now?

              @nataku83: I couldn’t figure out why a 42″ plasma TV on a BBJ cost about $40,000 until I started working for an airline that had to spend over a year to get LED mood lighting FAA approved!

        • Cattivella says:

          @nataku83: Government contract bidding is so screwed up.

          They reward the lowest bidder with no thought to whether that bid is realistic for quality workmanship. My dad, a general contractor with perfectionist tendencies, gets under bid all the time and you know what happens? The lowest bidder does a shit job and a few months or years down the line they call in my dad to fix it and pay a premium price for the fix. If they had gone with the fair bid by a reputable contractor, they wouldn’t have paid double. They have no foresight whatsoever.

          • Wormfather is Wormfather says:

            @Cattivella: They reward the lowest bidder with no thought to whether that bid is realistic for quality workmanship. My dad, a general contractor with perfectionist tendencies, gets under bid all the time and you know what happens? The lowest bidder does a shit job

            While I agree with your dads situation. We must also look at things like the freaking healthcare situation where they are all working together to screw the govenment out of as much money as possible.

    • varro says:

      @nataku83: The real money comes with the no-bid contracts – could the fact that Dick Cheney was once the CEO of Halliburton have *anything* to do with them getting all the sweet, sweet government cheese during the Iraq War? (Including building barracks with showers that electrocuted soldiers?)

  9. Fresh-Fest-1986 says:

    It seems to me that if they hadn’t become so greedy they might have pulled this one off forever. But $571 for a part after a bid of $41?

    Just because you can pull of the Kessel Run in 12 parsecs, doesn’t mean you should it everytime.

  10. plyhard13 says:

    The phrase, “A taste of your own medicine” comes to mind…

  11. Darrone says:

    Is it fraud when the company accepts the second price? (not poking the bear, looking for a well reasoned explanation).

    • Ninjastorm66 says:

      @Darrone: It is when the company’s employees look the other way because they were bribed.

    • RedwoodFlyer says:

      @Darrone: If it is…then so is everytime Best Buy prints a “mistake” in their circular, and a customer decides to just pay full price (instead of walking out since BB wouldn’t honor the lower price)

  12. JGKojak says:

    Where is the fraud?

    I don’t like the business practice, but isn’t this BEST BUY’S fault for, to quote what others around here say about mortgages, BUYING CHIPS THEY COULDN’T AFFORD.

    All Best Buy had to do was produce evidence of the earlier bid and take them to court. So… seems to me like Best Buy is the one who messed up here.

    As long as there is no tax fraud, not sure what the crime is.

  13. Pasketti says:

    The extra $529 was for the extended warranty. Duh.

    • doctor_cos wants you to remain calm says:

      @Pasketti: How did we not catch that?

    • Rachacha says:

      @Pasketti: Congratulations Pasketti, I think you just made the Cole’s defense counsel team.

      Don’t forget that the parts also had gold plated contacts, and cabeling that was specifically designed to carry digital signals necessary to ensure a prime computing experience.

  14. MarleneMops says:

    This is the way business works and how profit is made. Best Buy is simply upset because they are not the ones that profited and instead and ‘mom and pop’ shop did.

    • rpm773 says:

      @MarleneMops: Maybe, but I think the quaint ‘Mom and Pop’ image becomes a little strained when Mom and Pop have a number of exotic Italian cars parked in the garage of their North Shore mcmansion.

    • t-r0y says:

      @MarleneMops: This is NOT the way business works and how profit is made. This is fraud! Maybe not the way a lawyer will explain it and get his clients off the hook, but it is fraud.

      fraud
      -noun
      1. deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage.
      2. a particular instance of such deceit or trickery: mail fraud; election frauds.
      3. any deception, trickery, or humbug: That diet book is a fraud and a waste of time.
      4. a person who makes deceitful pretenses; sham; poseur.

      [dictionary.reference.com]

    • blainer says:

      @MarleneMops: Are you serious? They bribed employees of the company, who owed a duty to that company, to not do anything to combat the overcharges for which they received a fraudulent benefit.

      • jimconsumer says:

        @blainer: So Best Buy needs to sue the employees, then. There is nothing illegal about accepting a bribe between private parties (now, when it comes to government procurements, things change dramatically and I’m glad for that).

        • blainer says:

          @jimconsumer: Seriously? If you employ a baby sitter then I can bribe her to steal jewelry from you and you have no recourse against me?

          It is absolutely FALSE to say taht there is nothing illegal about accepting a bribe between private parties. If one of those parties owes a duty to another individual or entity and the bribe is made to entice that party to abviate his duty, then it is 100% a crime.

          • jimconsumer says:

            @blainer: That’s right, if I employ a babysitter and you pay her money to steal from me, she goes to jail. Not you. She did the crime. That she was motivated to do the crime by you makes little difference. Now, this changes if you’re running a big crime operation Mafia style, but on a small scale I doubt I would have any recourse against you.

            You claim it’s “100% a crime.” Can you back that up by citing an actual law?

            • blainer says:

              @jimconsumer: Why does it change if it’s the Mafia? Are you saying that there is a minimum amount of folks that must be involved in order for a conspiracy to occur?

              The law will vary by state to state, but here is a sampling from Illinois where it took place. Perhaps if your google wasn’t broken I wouldn’t have to waste my time on this:

              720 ILCS 5/8‑2, Conspiracy:A person commits conspiracy when, with intent that an offense be committed, he agrees with another to the commission of that offense. No person may be convicted of conspiracy to commit an offense unless an act in furtherance of such agreement is alleged and proved to have been committed by him or by a co‑conspirator.
              blaine: Here, the employee has defrauded his employer at the behest of the Coles. The coles, in furtherance of the crime, paid a bribe. Note that this only requires more than one person, not a Mafia style approach as you falsely claim.

              720 ILCS 5/16‑1, Theft: (a) A person commits theft when he knowingly: (2) Obtains by deception control over property of the owner
              blaine: Here the Coles obtained Best Buys property ($) by deceiving the company into believing that they were paying X for something when they were fraudulently inducing an employee to bill 10X.

              720 ILCS 5/17‑1, Deceptive Pratices: B) General Deception.
              A person commits a deceptive practice when, with intent to defraud, the person does any of the following: (a) He or she causes another, by deception or threat, to execute a document disposing of property or a document by which a pecuniary obligation is incurred.
              blainer: this speaks for itself. If these fail to persuade you, how about this:

              720 ILCS 5/29A‑1: A person commits commercial bribery when he confers, or offers or agrees to confer, any benefit upon any employee, agent or fiduciary without the consent of the latter’s employer or principal, with intent to influence his conduct in relation to his employer’s or principal’s affairs.
              blainer: and for the employee:
              Sec. 29A‑2.
              An employee, agent or fiduciary commits commercial bribe receiving when, without consent of his employer or principal, he solicits, accepts or agrees to accept any benefit from another person upon an agreement or understanding that such benefit will influence his conduct in relation to his employer’s or principal’s affairs.

              All these can be found here:
              [www.ilga.gov]

            • Ratty says:

              @jimconsumer: If you bribe that same babysitter to kill your kid for insurance money, it’s a crime for you AND her. You bribing someone to do something illegal makes you every bit as complicit and you’ll be prosecuted along with her.

              Paying someone to handle your dirty laundry is only legal in a laundromat.

            • PlanetExpressdelivery says:

              @jimconsumer: Actually no, in this case, they’d probably get hit in civil court for tortious interference since they interfered with the contract between the babysitter and the people paying her to babysit.

              That’s in addition to any criminal laws that may apply. Did you know that it’s illegal to hire hitmen? The hitmen themselves are committing murder, but the people hiring them are also guilty of conspiring to commit murder.

      • t-r0y says:

        @blainer:

        Are you serious?

        Yep.

        … for which they received a fraudulent benefit.

        See, you get it. All part of the fraud.

        • blainer says:

          @t-r0y: I’m on your side here. I feel like I’m taking crazy pills listening to these responses.

          • failurate says:

            I think we have found the missing link to why our economy is in the toilet. We seem to be dealing with a large minority of people who think that fraud “is the way business works and how profit is made”.

            I have a feeling the future is going to suck.

            • t-r0y says:

              @failurate: Business = Evil, Government = Good. It’s like I’m living in some Bizarro world. I hope I wake up soon.

            • god_forbids says:

              @failurate: We finally know what goes in step #2?

              But yes, I agree with you. Everyone nowadays says “I’m just out to get mine” and doesn’t give a damn about their fellow human, and especially not about the businesses and capitalism that created the lifestyle we all enjoy. The economy is in the toilet because of remorseless greed and everything we saw in that other post about foreclosed houses full of stuff. Show you what happens when real-world “success” is supplanted by /b/tard “WIN” which always involves ‘sticking it to’ someone else.

              Sad.

  15. R3PUBLIC0N says:

    You know I’m not entirely certain this is fraud. It’s employee misconduct on the part of the best buy employees who took the gifts, but best buy accepted the goods and paid the inflated price. There’s nothing illegal about that.

    With a good lawyer, they can probably get those cars back.

    • blainer says:

      @R3PUBLIC0N: What do you think that Best Buy is? Do you think that the buildings are responsible for accepting the goods and authorizing payment of the inflated price?

      Best Buy is made up of individuals. The individuals at Best Buy responsible for authorizing payment were bribed by the Coles to authorize marked up prices; this is the definition of fraud!

      Consider, you bribe an employee to steal a tv and bring it to your home. Under your theory of fraud, you have done nothing wrong. Switch $ for the tv and you have the same situation.

      • Wes Chevalier says:

        @blainer: How about this you take your car into a dealership and get 75% off of your new cars price tag is that a bribe or a trade in?

        You go to a restaurant that your buddy is a manager of and he comps your meal, the next month you take him with you when your family goes to the bahamas was the meal the bribe or the trip to the bahamas?

        • CrowMignon says:

          @Wes Chevalier: I can’t tell if the loud whooshing sound over your head is the points you aren’t getting, or the traffic on the bridge you live under. More clues, please?

        • god_forbids says:

          @Wes Chevalier: YANAL. Neither am I, but damn dude. Bribery requires at least that a contract has been broken or harm has been done to a counterparty. If you got 75% off an ’09 Beemer for you 92′ Accord b/c you paid the employee in hookers and beer, yes it’s fraud. If your friend comped you a $100 meal once a week in exchange for the trip, it’s bribery.

          Fairly innoculous behavior can be illegal when done habitually, though that too has to pass the materiality test. Your friend comping you a toothpick a day wouldn’t matter, for example.

        • blainer says:

          @Wes Chevalier:

          I don’t think that you understand how tradeins work. Generally the employee doesn’t keep your trade in. I don’t understand where the bribe is here.

          Yes, #2 is technically a bribe under the Illinois code if the state can establish a quid pro quo and your buddy wasn’t authorized to comp your meal. Having said that, I think that the state would decline to prosecute due to the amounts involved.

    • Murph1908 says:

      @R3PUBLIC0N:
      By this logic, if I bribe your nurse to not give you your life-sustaining medicine, I am not guilty of murder?

      It was scheme to defraud Best Buy. The perpetrators of this scheme was Chip Factory and the Best Buy employees that assisted.

  16. MaytagRepairman says:

    They must have also sold Best Buy usb cables.

  17. plyhard13 says:

    Unless there is more to this story, I have a feeling they are not going to be seeing any jail time for their “fraud”.

  18. jcargill says:

    Why should politicians have all the fun in Illinois?

  19. GMFish says:

    Maybe I’m missing something, but I’m having trouble understanding why this is fraud.

    Fraud cannot be based on future promises. And here Cole made a bid based on a future promise. He changed the terms of the bid. Best Buy accepted the new terms of the bid. Everyone’s happy.

    • blainer says:

      @GMFish: Wrong. Best Buy employees fraudulently authorized payment under the new terms because of the bribes paid by the Coles.

      Am I taking crazy pills this morning?

      • GMFish says:

        @blainer: “Best Buy employees fraudulently authorized payment under the new terms because of the bribes paid by the Coles.

        Let’s say that the employees accepted the counter offer based on their intent to defraud their employer. How does that mean that the Coles committed fraud? You may not know this, but in sales its quite common for sellers to offer gifts to entice buyers. If Best Buy had a policy where its buyers could not accept gifts, that’s not the Coles’ problem.

        And I’m sure the article referenced above does not contain all the information of the case, but I see nothing where the Coles were charged with bribing anyone.

        And I’ve personally never even heard of a criminal charge of bribing a non-governmental official. That would not really make any sense. What would be the difference between a really good salesman and a criminal briber?!

        You took the buyer out for drinks?! That’s a bribe?! Say hello to your prison cell!

        • blainer says:

          @GMFish: The simple answer is that a bribe =/= a gift. Vendors taking sales persons out for beers or giving them hockey tickets to grease the wheels on a deal is acceptable because accepting a deal is not illegal and is in the purview of the sales person’s authority. If Best Buy’s policies were to accept the lowest bid, period, then we are entering bribe territory if the winning bid is not the lowest.

          HOWEVER, neitheris not the case here. Here we have arms-length transactions whose terms were changed by the fiduciary because of a benefit accrued solely to the fiduciary to the detriment of the company. This is the classic definition of an illegal bribe.

          Consider that under your theory, you have just made kick-backs completely legal.

    • CrowMignon says:

      @GMFish: Simply this: The bribes were not made to the people setting the terms of the deal, the bribes were paid to the people approving payment on inflated, fraudulent invoices.

      This was done in order to steal money in excess of what was owed according to the deal.

      Fraud.

    • angryhippo says:

      @GMFish: What I don’t get is why BB hasn’t gone after their own employees for theft on this. The employees who authorized the new price directly profitted it.

      • blainer says:

        @angryhippo: This is a discussion of the criminal case. There is nothing in the OP that indicates what civil actions are ongoing.

      • Charmander says:

        @angryhippo: They have. They are. Why do think think they aren’t? Did you read the original article from teh Chicago Tribune?

        “Former Best Buy employee Robert Paul Bossany of Prior Lake, Minn., managed the purchase of parts from outside vendors. He pleaded guilty Jan. 29 to charges of conspiracy to commit mail fraud and money laundering. He was fired Oct. 2, Best Buy said.

        The U.S. attorney’s offices in Minneapolis and Chicago declined to comment.

        Bossany is cooperating in exchange for a recommendation of leniency from prosecutors, his lawyer, Daniel Scott, said. Scott estimated that Bossany took $100,000 in cash and gifts from the Coles.”

    • PlanetExpressdelivery says:

      @GMFish: Are some Consumerist readers from corporate America today?

      Both parties involved in the deal are committing fraud. The Best Buy employees whose duty is to fulfill contracts with the company’s best interests at hand and the supplier who agreed to perform for a specified price. The only reason the suppliers were able to adjust the price is because they bribed the employees in exchange for adjusting those contracts.

  20. RodAox says:

    I believe in Karma, you rip off customers and then it finally comes back to bite you in the ass 10 folds. If Best Buy did not employ scum that would give into bribery then this would not have happened. But to be honest I am glad it did happen….

  21. deejaypopnfresh says:

    hahahaha
    if anyone deserves this its best buy!

  22. jtheletter says:

    No posts yet questioning why $2.8 million worth of private property was seized months ago and still no charges placed.

    It would make sense to seize the vehicles if they contained evidence of a crime, but that seems unlikely given the nature of the accusations. Also, for those who say the cars were seized because they were bought with the proceeds of a potential crime: what about the house itself? Or any other expensive item? Why were just the cars taken?

    Look, I’m all for this being investigated and any crimes being charged, but without a charge where’s the due process for the seizures?

    • GearheadGeek says:

      @jtheletter: The portable, easy-to-hide valuable assets were seized. The house will be there to seize later, and if there really are prosecutable offenses, it’s a bit of a gift to the fraudsters to leave them in their house while the charges are percolating.

      • Applekid ┬──┬ ノ( ã‚œ-゜ノ) says:

        @GearheadGeek: I guess the objection is why the seizure was months ago and there are STILL no charges.

        The phrase, I believe, is “shit or get off the pot.”

      • jtheletter says:

        @GearheadGeek: “The portable, easy-to-hide valuable assets were seized.”

        So these people have no gold, no paintings, no jewelry, no bank accounts, nothing else of value that’s portable or easy to hide? I don’t know the details of the law pertaining to property seizure during an investigation, so this post is pretty much a request for some of those details from others who might know.

        Where is the authority to take this private property coming from when there are no charges, the seized articles were (likely) not used in commission of a crime (e.g. bank robbery getaway car) and authorities cherry-picked what to take? Was there a court order to seize $X worth of assets and the cars satisfied that?

        For a country that teaches it’s youth that our legal system is based upon an assumption of innocence and guarantees of due process, there seem to be an awful lot of exceptions to those ideals in practice.

        Can anyone fill us in on the actual legal justification for such seizures?

        • jimconsumer says:

          @jtheletter: I am equally disturbed by this. I read about U.S. government agents seizing people’s property all of the time. Charges may or may not come, they may or may not get the property back, etc. Where is the justification for this?

        • Happy Tinfoil Cat says:

          Last I remember, money from criminal activity is taxed at 108% and not paying said taxes can get your shtuff nicked by the IRS. The gov confiscates property all the time, if you press them to give it back, they press charges.

    • CrowMignon says:

      @jtheletter:
      My guess, and it is a guess, is that the Coles are cooperating somewhat, maybe helping to build the case against the BB insiders. Perhaps leaving them in their house and leaving the charges nebulous at the moment are the payment for that cooperation? If we haven’t heard of objections to this behavior from their lawyers, then I would kind of assume everyone is on the same page…

    • Charmander says:

      @jtheletter:
      “Also, for those who say the cars were seized because they were bought with the proceeds of a potential crime: what about the house itself? Or any other expensive item? Why were just the cars taken?”

      Seriously people, you’ve GOT to start reading the original article before you start making comments because most of the time, you can answer your own question:

      “The Coles still live in the home, but the government has filed paperwork to place a lien on it.”

  23. AstraBabble says:

    They may have seized the property, but they aren’t exactly going to haul the house away. I don’t really see how this is fraud either. It’s bait and switch, but Best Buy should have dealt with it the first time. There is bribery, which may be illegal, but then again as a pp mentioned, the best buy employees were involved for quite a long time. Looks to me like Best Buy is more at fault here.

    • blainer says:

      @AstraBabble: This is insane! This isn’t even an issue!

      Say you have a full time nanny who watches your kid during the day. While she’s great with your kid, she has some unsavory friends and makes some poor decisions. To that end, a friend of a friend pays her to steal jewlery from your house every now and then. Are you at fault if it takes you a year to notice?

      • jimconsumer says:

        @blainer: No, the Nanny is at fault for the theft, as she actually committed the crime. In the Best Buy case, the Best Buy employees who ripped the company off by accepting super high bids are at fault.

    • failurate says:

      @AstraBabble: Think of it this way, say the employee is working a cash register, the customer slips him $100 in exchange for ringing up a $1,500 TV for $150 instead of the $1,500 that is due. Both the employee and customer have committed theft/fraud.

      Now move this over to what actually happened… they slip the employee $5,000 to sign off on invoices that are supposed to be $10,000, but instead are $100,000. The employee and the supplier defrauded the company.

  24. WillG says:

    jtheletter,

    Thanks, that’s exactly what I was going to post.

    Why doesn’t anyone care that if due process doesn’t apply to EVERYONE then it applies to NO ONE?

    It’s been two years, time to charge them or return their ill gotten gains.

  25. Papa Midnight says:

    So I can basically look at this 1 of 2 ways:

    1) I hate Best Buy enough that I actually like the fact this happened to them.

    or

    2) They’re responsible for some of the higher prices at Best Buy.

    Considering the probability on number 2, especially comparing CompUSA’s former prices and Circuit City’s current and former prices, I’ll go with number 1.

    On that note, atleast they pay their taxes…

  26. chipfactory says:

    There is more to the story. They use a third party website to Chip Factory would bid lets say $45 and once best buy approved it they had a way to go back into the third party website and alter the bid to $450. Then he paid $100K to the best by employee to make sure the invoices where paid and cover up and questions that came up. Robert Bosney was the Best Buy employee and pleaded guilty and is facing up to 14 years in jail. Chip factory commited mail fraud by sending false invoices as well as the fact that they DID not claim it all on their taxes.

  27. jjeefff says:

    What law did they break?

  28. savdavid says:

    Amazing how people can live in denial that they will never get caught. On the other hand, once you steal millions of dollars you can afford a good lawyer and never go to jail.

  29. microcars says:

    for those asking about “what law they broke” to explain why they got stuff seized:
    Look up RICO
    [en.wikipedia.org]

    “When the U.S. Attorney decides to indict someone under RICO, he or she has the option of seeking a pre-trial restraining order or injunction to temporarily seize a defendant’s assets and prevent the transfer of potentially forfeitable property”

    • jtheletter says:

      @microcars: How can a prosecutor invoke the RICO statute when there have been no charges filed? Your quote says “When the U.S. Attorney decides to indict someone under RICO[…]” Where’s the indictment? The vehicles were seized in November/December.

      So the government gets to confiscate private property with no charges for an indefinite amount of time? Again, looking for the legal justification for this behavior.

  30. Japheaux says:

    Kind of funny with a name like, ‘Best Buy.’ I wonder when and where the auction will be held on those cars.

    One of two things will happen:
    1) This couple will end up in the Obama adminsitration somewhere
    2) They will receive a bailout for their failed company because, afterall, they are victims.

  31. kwsventures says:

    Another day. Another fraud. Bring back the chain gang, hard labor prisons for these criminals. Do the crime and pay an enormous physical and mental penalty.

  32. MartinFeardie says:

    Something tells me that some Best Buy purchasing managers didn’t bother to claim all those ‘gifts’ on their tax returns.

    And since Best Buy paid the contracts, I’m not seeing how they were defrauded. Payment constitutes acceptance of the new terms of the contract. They could have canceled the contract if the terms had changed to their displeasure. If anything, the Cole’s ‘inside partner’ at Best Buymay be liable for restitution.

  33. BugDude10 says:

    Maybe Best Buy just forgot to submit the $529 rebate forms, with the chips’ UPC codes and copies of the sales receipts, by the deadline.

  34. Brandon Koller says:

    Hmmm… 20 x 571 ≠ 14.2 million.

    Yes, it was a prickish thing to do. But I do not see how, after they screwed Best Buy the first time, Best Buy would have looked at it as off. Then the second time? Now Best Buy is just giving them a second shot, still screwed. Third time on? Best Buy is being retarded and deserves to be taken advantage of.

    Fool me once, shame on you. Fool me twice, shame on me. Fool me enough times to net 14 million dollars, let me bend over and ask that you please be gentle.

  35. Anonymous says:

    Wow. Many on this string are cheering Chip Factory!

    By this logic, I should do in my industry what Chip Factory did in theirs because I’d have nothing to lose and, obviously, a lot to gain. If the over-charge is detected, I say it was a fat finger mistake and I’ve lost nothing trying as I hone my skills and look for my next potential victim. If the invoice is paid, I continue making obscene profits until such time as I’m caught. Then I could keep what I’ve made and live off my nest egg while the rest of you continue to work for a living. The government would have no case against me.

    What kind of world would it be if we all acted like Chip Factory, bilking whomever we could get away with? Imagine you ran a business, that you were not perfect, and had a vulnerability exploited by a supplier acting in cahoots with one of your employees. Upon discovery would you agree you deserved it and should have no claim on what you were scammed out of?