HOUSTON (CN) – A 44-year-old British national was indicted Wednesday on charges of costing Hewlett-Packard more than $10 million by using straw buyers to buy computer equipment at discounts.
Mark James was charged with conspiracy to commit mail fraud, and conspiracy to commit money laundering. If convicted he faces up to 40 years in prison, and up to $750,000 in fines.
James allegedly recruited business owners to pose as customers interested in buying large amounts of HP computer equipment.
“The indictment indicates he then directed them to falsely state the procured products would be used internally by those individuals’ businesses and not be resold,” the U.S. Attorney’s Office said in a statement. “Based upon those false representations, according to the indictment, HP applied steep discounts to the products for various business reasons to include the opportunity for future large volume sales, further utilization of HP products in the customer’s technology infrastructure and continued maintenance of existing HP products.
“These types of transactions fell under HP’s ‘Big Deal’ program and HP would not have offered the degree of discount on its products, which often reach millions of dollars in a single transaction, without the false representations by James’s straw buyers that the products would be used internally and not be resold.”
James is accused of running the scam from May 2009 through November 2011.
Once negotiations were complete on a Big Deal, the company James was getting the equipment for would send money via an international wire transfer to a bank account James maintained in the United Kingdom under the name of his company, Roamer Media, prosecutors said.
James then transferred the money to the straw buyers’ bank accounts so they could forward payment for the products to HP or its partners, and deceive HP into believing the straw buyer was buying the equipment, according to the U.S. attorney’s statement.
“In reality, the HP computer equipment never reached the straw buyers, but was instead diverted for resale by the company for whom James was procuring the discounted products. The indictment sets forth four different straw buyer transactions, including an undercover transaction in which James was unwittingly corresponding with individuals cooperating with law enforcement in an attempt to fraudulently procure a Big Deal discount,” prosecutors said.