On Dec. 20, Gerald Kent, 52, owner of Providence, R.I.–based jewelry distributor Kent Jewelry, pled guilty in federal court to wire fraud and aggravated identity theft for allegedly using fake invoices to defraud his factoring company of more than $3.6 million.
According to an affidavit from an FBI special agent which accompanied the criminal complaint, Kent Jewelry had traditionally sold its products over e-tailers Groupon and Zulilly. It then sold its accounts receivable to a Chicago factoring firm in exchange for financing.
Both Groupon and Zulilly terminated their relationships with Kent in summer 2016. Even so, Kent continued to send the factoring company over 1,000—now discovered to be fraudulent—invoices from those sites, the affidavit charged.
To support the unusually sophisticated scheme, Kent hired a programmer to design a fake Groupon payments portal, enlisted that programmer to impersonate a Groupon employee in teleconferences with the factoring company, and opened bank accounts bearing the names of Groupon and Zulilly so that the financier would think Kent was still receiving payments from those companies, the complaint said. The programmer later became a cooperating witness and recorded his conversations with Kent.
Kent was ordered released on $50,000 unsecured bond. He will be sentenced on March 9, 2018.
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