Illinois couple indicted in scheme to defraud Best Buy

An Illinois couple was indicted in federal court Monday in connection with a scheme to defraud Richfield-based Best Buy Co., Inc. by overbilling it for computer parts, authorities said.

According to the U.S. Attorney's Office in Minneapolis, Russell Adam Cole, 49, and Abby Rae Cole, 52, both of Deerfield, Ill., were charged with one count of conspiracy to commit mail fraud and wire fraud, 12 counts of mail fraud, six counts of wire fraud, one count of conspiracy to commit money laundering, and one count of transactional money laundering.

Authorities believe that from December 2002 through November 2008, they conspired with Prior Lake resident Robert Paul Bossany, 37, and others to devise a scheme to defraud Best Buy and obtain money and property by means of false and fraudulent pretenses.

The indictment alleges they owned and operated a computer parts distribution company called Chip Factory, Inc. Abby Cole owned the company and served as its CEO, while Russell Cole served as president, officials said.

From June 2003 through August 2007, Best Buy was the primary customer of Chip Factory's business and accounted for the majority of its sales, officials said.

According to the indictment, Chip Factory quoted fraudulently low prices on Best Buy's bid for parts for customer repairs. The company also allegedly failed to possess the needed parts when it submitted those bids.

In all, the indictment alleges that Chip Factory fraudulently invoiced Best Buy about $40 million more than it bid through Best Buy's bidding program.

Bossany pleaded guilty in January to one count of conspiracy to commit honest services mail fraud and one count of money laundering for his role in the scheme. He was a Best Buy employee and was responsible for managing the purchase of computer parts from outside vendors. Bossany was the primary Best Buy contact for Chip Factory.

The indictment alleges that the Coles repeatedly and secretly gave Bossany large amounts of cash, checks and property, including gift cards, a Harley-Davidson motorcycle, an all-terrain vehicle, furniture and clothing. The defendants also allegedly sent Bossany magazines, compact discs and DVDs in which cash, checks or gift cards were hidden. These items were sent to Bossany's home address rather than to his office to conceal the fraudulent scheme and its proceeds.

In return for these gifts, Bossany provided the Coles with internal Best Buy information, including communication concerning the bidding program and other vendors.

If convicted, Russell and Abby Cole each face a potential maximum penalty of 10 years on the transactional money laundering count and 20 years on every one of the other counts.

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