Trailers Are for Travelers 

What were million-dollar Irish scam artists doing living in this trailer park?

Page 7 of 8

On the other hand, the extent of the scam turned out to be larger than anyone had imagined. As Home Depot's investigators combed back through their computer records, looking for purchase combinations, identification numbers, and dollar amounts that matched the group's usual pattern, they turned up evidence that Davenport and Hay had visited stores in at least 24 states. The damages were also growing. The original estimate of Home Depot's loss was slightly under $400,000, but according to Odell, the retailer now expects to collect $600,000 in restitution. In fact, he surmises that its loss might be even higher. Although Home Depot's current computer system can only track the group's refunds back to 2001, Davenport's 1999 arrest at a Home Depot store, which apparently was never deeply investigated, may indicate that he was doing the bar-code switch several years earlier. Odell estimates that if Davenport was performing the refund scam at the same velocity back then as when the group was arrested last year, the overall loss might approach $1 million. But finding out just how much money the three drained from Home Depot is trickier than it seems, since after the introduction of the gift cards, the transactions often involved no real money at the retailer's end. "In some cases they would actually use one of the cards to make another purchase, so it all became cashless," Odell says. "They were just turning cards."

It's a loss Horowitz believes the retailer could have avoided if it had a better merchandise tracking system. After all, Home Depot was cashing out refunds for hundreds more high-end faucets and light sets than it had ever sold. "It doesn't make sense and the computer's not picking it up," he notes. "And it should, because you're taking back into inventory what you never sold. They obviously have no decent computer controls."

Another flaw in the system was the Home Depot policy that let customers return items without receipts and discouraged store cashiers from challenging them even if transactions seemed a little hinky. After all, if the customer is always right, nobody wants to offend them by giving them the third degree. "Most businesses now are so much into customer service that they don't look into fraud," Pickard says. "You can't ask for ID in some stores anymore." And even if clerks feel that something is amiss, she says, they often just let things slide. "What is their investment in getting into a beef with people who are returning a product?" she shrugs. "They're making minimum wage."

Bar-code switching isn't a particularly sophisticated or innovative form of crime -- it's just that Davenport and Hay managed to elevate it to a whole new level of magnitude. "Most boosters will change the tag in the store and of course the wrong item will come up," Horowitz notes. "The great innovation here is they went to Kinko's and did it. They came in pre-loaded."

Home Depot loss-prevention officers are reluctant to discuss how they've tightened up their methods in light of the bust -- after all, Odell notes, they've had a rash of copycat attempts since the arrest made headlines last year. But the retailer says it has no plans to abandon its use of the bar-code system. However, its loss-prevention department makes it clear that the need for complex fraud investigations only come along once in a blue moon, and it's never wrestled with anything like this before. "Absolutely, it's been the highlight of my career," Jackson says.

After slightly more than a year in jail, Davenport, Hay, and Broderick pled guilty this July to conspiracy to commit wire fraud. Broderick is slated for sentencing on September 15, Hay and Davenport on October 20. The two men are eligible for a maximum sentence of five years in jail and a $250,000 fine. Broderick, who had a lesser role in the crime and no criminal history, is eligible for twelve to eighteen months and is expected to be given credit for the year she has already served. Giller expects Broderick will be given two to three years of supervised release, although it is likely that she will be deported shortly after her sentencing. Davenport and Hay will also likely be deported once their time is served. All three are responsible for paying restitution to the Home Depot. Now the question is, how much?

Hay believes the trio's sentencing has been overly harsh for the crimes committed. For example, he writes, the men were told that all three defendants needed to accept the same deal, so they took one less favorable to them to guarantee Broderick's earlier release. They also feel they've gotten tougher treatment because they are not US citizens. "The federal prosecutor held the INS over us, saying that if no deal was taken we could then be charged with illegal reentry, so we were left with no option but to take what was offered -- thirty months and deportation," Hay writes. "Had we been Americans, this sentence would have entitled us to enter programs in the federal system which would have entitled us to up to a year off -- certainly six months in a halfway house -- and some sort of work-release program, but we get nothing because we are classified as deportable aliens."

Additionally, Hay complains that the government's seizure of all their money has made it difficult for them to mount a vigorous defense. "We had lawyers, but the federal government froze the funds and we had to take federal public defenders," he writes. "Since June of 2002, we have been in this system unable to buy toiletry items such as soap, shampoo, or deodorant -- and even stamps and writing paper is a problem."

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