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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