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Tuesday, May 21, 2024 | Back issues
Courthouse News Service Courthouse News Service

$2 Million Textbook Scam Alleged in SoCal

SANTA ANA, Calif. (CN) - College students stole $2.5 million worth of textbooks from an online retailer and sold them to men who run college bookstores in Orange County, the online company claims in court.

Chegg Inc., of Santa Clara, sued Kamvar Farahoud, Salchi Hossein, Varzandeh Javad and the Mission Viejo-based business College Books, on Oct. 1 in Orange County Superior Court.

Javad runs College Books, according to the lawsuit.

"This is an action to recover up to $2,500,000 worth of textbooks stolen from the online textbook retailer, Chegg," the 10-page complaint states. "Through an illicit scheme, certain college students in the Orange County area ('the students') discovered a way to fraudulently obtain textbooks from Chegg's website, chegg.com. Through this scheme, the students illegally acquired over 10,000 textbooks belonging to Chegg and subsequently sold them to defendants who own and operate college bookstores in Orange County."

Chegg claims that the defendants "were not bona fide, good faith purchasers of the stolen textbooks. Rather, as prudent purchasers, highly experienced in the college textbook industry, defendants had constructive notice that the thousands of textbooks being sold to them (many of which bore obvious signs that Chegg's labels had been removed) for a nominal purchase price were stolen goods."

Chegg claims the students ordered textbooks from its website and had them delivered to different Orange County addresses. When the textbooks arrived, Chegg says, the students reported that they had received the wrong book, so Chegg "immediately" sent another copy.

"Instead of returning the original textbooks in accordance with Chegg policies, the ringleaders retained both the original and replacement copies, and, on information and belief, sold them to defendants for resale in defendants' bookstores," the complaint states.

Chegg claims the students used the scheme to swipe more than 10,000 textbooks worth between $1 million and $2.5 million, which they sold to the defendants for cash.

To top it off, Chegg claims, the defendants bamboozled the students.

"In consideration for $150,000 worth of stolen textbooks, defendants entered into an agreement to transfer a bookstore located at 7314 Center Avenue, Huntington Beach, California 92647 ('College Books Huntington Beach') to the students (the 'agreement'). The agreement included the physical bookstore as well as its full inventory of new textbooks at the time of the agreement. However, upon information and belief, defendants never delivered the inventory of new textbooks promised. Rather, Chegg is informed and believes, and thereupon alleges, that defendants induced the students into the agreement on the fraudulent representation that defendants would transfer the inventory of new textbooks inside of College Books Hunting Beach at the time of the agreement (the only thing of real value) but, in fact, never had any intent to do so.

"On or about September 4, 2014, the students assigned to Chegg any and all rights that they held in the agreement as well as any and all causes of action or claims the students may have against defendants," the complaint states.

Chegg claims the defendants have threatened to destroy the books, damage them, or take them out of state to keep Chegg from getting them back.

|Chegg seeks restitution and punitive damages for seven causes of action, including conversion, fraud and unfair competition.

It is represented by Gregory Doll with Doll, Amir & Eley of Los Angeles.

An unidentified employee with College Books declined to comment to Courthouse News, saying he was "closing the store" and did not "have any time."

The call was made at 3:45 p.m. Friday. According to the store's Yellow Pages listing, its business hours are from 8 a.m. to 5 p.m. on Fridays.

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