In two weeks the US Treasury will auction 11 supercars valued at nearly $US3 million, including a Ferrari Enzo. If you ever bought a piece of electronics at Best Buy that didn’t work, here’s where your cash may have gone.
Last December, Russell Cole of Deerfield, Minnesota, was sentenced to 15 years in federal prison on fraud and tax evasion charges after bilking Best Buy for $US31 million over several years. Cole’s company Chip Factory scammed Best Buy via an online supplier auction; Chip Factory would submit low-ball bids to supply certain parts, then hike the price it actually billed Best Buy. Cole bribed a Best Buy employee to keep the scam going, often sold defective parts to the chain, and hid much of his and Chip Factory’s income from the Internal Revenue Service.
Cole’s wife Abby Rae, who had founded Chip Factory in her basement before she married, was sentenced to three years probation; Russell Cole contended his wife had left him in charge of the business and had no idea about how big his scams had grown. As Cole’s lawyer said: “He took one small step, which led to another and then another. He then made a fortune and somehow rationalised that he’d actually earned it himself.”