FINANCE

Report: Couple guilty of defrauding Best Buy of more than $41 million

BY CSA STAFF

New York City A federal jury on Thursday convicted an Illinois couple of defrauding Best Buy Co. out of more than $41 million, according to a press release from U.S. Attorney B. Todd Jones, the Minneapolis St. Paul Journal reported.

Russell and Abby Cole, who owned a company called Chip Factory, overbilled Richfield, Minn.-based Best Buy for computer parts from 2003 through 2007 and conspired with former Best Buy employee Robert Bossany to conceal the fraud. Bossany pleaded guilty in January 2009 to one count of conspiracy to commit honest services mail fraud and one count of money laundering, admitting to his role in the crime.

Following a 17-day trial in Minneapolis, Russell Cole, 50, was found guilty on one count of conspiring to commit mail fraud and wire fraud; 12 counts of mail fraud; five counts of wire fraud; four counts of tax evasion; one count of conspiracy to commit money laundering; and one count of conspiracy to defraud the United States.

Abby Cole, 53, was convicted on one count of conspiracy to commit mail fraud and wire fraud, one count of conspiracy to defraud the United States and four counts of tax evasion.

The Coles, who were originally indicted in July 2009, face a potential maximum penalty of five years in prison for conspiring to defraud the United States; five years in prison for each of the four counts of tax evasion; and 20 years on the conspiracy to commit mail fraud and wire fraud count the report said. Russell Cole additionally faces a potential maximum penalty of 20 years on each mail fraud and wire fraud count, as well as on the conspiracy to commit money laundering count.

U.S. District Court Chief Judge Michael J. Davis will determine their sentences at a future hearing, which has not yet been scheduled.

In a statement, Best Buy spokeswoman Susan Busch said the company is “satisfied that justice has been served.”

“While we are grateful that we can put this trial behind us, we remain dismayed that a few individuals were able to perpetrate such a significant fraud against us,” she said. “Since learning of this scheme back in 2007, we made significant changes to our processes to help ensure that this type of fraud does not occur again. We will continue to use this situation as a learning experience so we can better serve our customers, shareholders and employees.”

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

Polls

Consumer confidence is high. Is that reflected in your stores’ revenues?

View Results

Loading ... Loading ...
News

Pier 1 Q1 comps up 14.3%

BY CSA STAFF

FORT WORTH, Texas Pier 1 Imports reported that comparable-store sales for the first quarter ended May 29 increased 14.3%. Last year’s comparable-store sales declined 7.5% for the first quarter ended May 30, 2009. Total sales for the quarter improved to $306 million compared with $281 million in the year ago quarter.

Alex Smith, president and CEO said, “We are extremely pleased with our first quarter sales increases. Comp-store sales continue to be driven by consistent increases in conversion rate, average ticket and traffic. As previously reported, March sales benefited from the earlier Easter holiday but business was solid throughout April and May ending with a strong Memorial Day weekend. All major merchandise categories performed well during the quarter and the variations in the performance geographically were much less than last year. We look forward to discussing our first quarter results in detail during our upcoming conference call.”

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

Polls

Consumer confidence is high. Is that reflected in your stores’ revenues?

View Results

Loading ... Loading ...
News

Report: Consumer spending slows in Q2

BY CSA STAFF

PURCHASE, N.Y. According to the lates report from MasterCard Advisors’ SpendingPulse, this month, more retail sectors showed a respite in year-over-year growth, as slow economic recovery appeared to weigh on the U.S. consumer’s spending behaviors.

Michael McNamara, VP research and analysis for SpendingPulse, observes, “The momentum in consumer spending that was building through the first quarter, seems to be taking a breather in the second quarter of 2010, at least so far.  Financial volatility in the capital markets and ongoing macroeconomic issues could account for this shadow cast over the recovery in consumer spending.  Some sectors seem to be responding to specific disruptive events, such as the expiration of the Federal housing tax credits, where previously we’d noticed a beneficial “echo” effect on housing related categories such as Furniture and Furnishings. In addition, Memorial Day occurring a week later than it did last year, could have pushed some spending into June, 2010.  Nevertheless, we continue to see strength in pricing, and in most categories, we are registering solid increases in the SpendingPulse Price Index, indicating that inventories continue to be aligned to demand, and retailers have not had to return to steep discounting.”

According to the report, May was another strong month for e-commerce, with the channel seeing sales increase 13.7% over May 2009. The best performing sub-categories of e-commerce were children’s apparel and family apparel, growing 30.4% and 26.2% respectively, on a year-over-year basis.

 

Electronics and appliances sales were down 0.7% from last year. Consumer electronics sales fell by 0.8%, while appliance sales were flat. SpendingPulse reported that the appliance category’s flat sales could be explained by expiration of the Federal Housing Credit at the end of April, while the lack of new product launches in the consumer electronics sector could account for any weakness in this usually strong sub-category.

 

In a second month of decline, total U.S. apparel decreased 3.7%, with declines in all sub-categories except children’s apparel, the report found. Steepest declines were in men’s apparel, down 10.4%, the usually strong footwear category, down 7.3%, and women’s apparel, down 6.1% .  However, pricing continued to hold firm for the category as a whole, showing a healthy 5.4% increase in the overall apparel pricing index, on a year-over-year basis, SpendingPulse reported.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

Polls

Consumer confidence is high. Is that reflected in your stores’ revenues?

View Results

Loading ... Loading ...