A British citizen has been charged with conspiracy to defraud Hewlett-Packard out of $10 million by setting up phony companies to get big discounts on computers he would then resell.
The U.S. Attorney's Office announced that Mark Allan James, 44, had been charged and is expected in court today.
Jones took advantage of HP's "Big Deal" program, prosecutors say, in which the company offers large discounts for customers who will be buying lots of product.
The USAO says he "recruited individual business owners to pose as persons interested in securing a large volume of computing products...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."
The straw companies would pay HP for the equipment, so the computer giant thought everything was on the up and up.
James, however, took the deeply discounted merchandise and resold it for a handsome profit, prosecutors say.
"In reality, the HP computer equipment never reached the straw buyers, but was instead diverted for re-sale by the company for whom James was procuring the discounted products," the USAO says.
The scheme worked from May 2009 through November 2011 "and caused losses to HP in excess of $10 million," prosecutors say.
He faces up to 20 years imprisonment and up to a $250,000 fine. He faces the same sentence if convicted on an international money laundering conspiracy in addition to a fine of up to $500,000 or twice the value of the laundered funds, whichever is greater.
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