The case was investigated by the Secret Service and FBI.
PROVIDENCE, RI – The owner of a jewelry business in Johnston, RI, has been charged with wire fraud and aggravated identity theft.
Gerald Kent, 51, is accused of orchestrating a fraud scheme that defrauded a debtor finance company of more than $3.6 million dollars, the U.S. Attorney’s Office for the District of Rhode Island said in a press release. The matter was investigated by agents from the U.S. Secret Service and the FBI.
Kent’s company primarily sells jewelry using websites such as Groupon.com and Zulily.com, according to the release. WJAR-TV reports that he is president of KentsJewelry.com Inc.
Authorities allege that Kent submitted fraudulent invoices to a factoring (debtor finance) company based in Chicago, mostly from Groupon and Zulily, which resulted in payments to Kent of nearly $5 million dollars.
He’s alleged to have:
- Created hundreds of fraudulent invoices.
- Created a fraudulent clone of Groupon’s site.
- Enlisted coconspirators to pose as Groupon employees.
- Opened bank accounts in the names of Groupon and Zulily in order to deceive the debtor finance company.
Factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount. Factoring companies work with businesses to provide working capital in order to grow their businesses without having to wait for outstanding accounts receivables to be paid.
Kent was arrested Wednesday at Foxwoods Resort Casino in Connecticut. He appeared before U.S. District Court Magistrate Judge Patricia A. Sullivan and was ordered detained pending a detention hearing on July 26.