From: The Oregonian - 12/9/03
Men sent to prison for Internet scam
A judge gives long sentences for a pair passing off junk as overstock from large stores
12/09/03
Two men who used the Internet to peddle junk merchandise they claimed was perfectly good were sentenced Monday to lengthy federal prison terms.
U.S. District Judge Garr King sentenced Ethan J. Platteborze and Kenneth S. Kluss for scamming small retailers. Both men pleaded guilty earlier this year to federal conspiracy and fraud charges.
Platteborze was sentenced to almost four years and Kluss was sentenced to nearly three years. Together they must pay back about $388,000.
The two men were accused in the summer of 2002 of fraudulently selling big-box overstock to about 100 mom-and-pop stores all over the nation from December 1999 to February.
On their Web site, they claimed Oregon-based Cavalier Salvage was a nationwide company with 27 warehouses and a fleet of trucks that moved "Grade-A merchandise" from stores such as Sears, Kmart and Costco.
The FBI discovered that the men were running a scam out of apartments in Tualatin, Tigard, Wilsonville and Las Vegas, Nev. They owned no trucks or warehouses, and the merchandise they were selling was junk that had been damaged in shipment or returned broken by customers.
Customers who called up the Cavalier Salvage Web site saw photos of huge warehouses stocked with goods for sale. The real owners of the warehouses — City Liquidators, a large warehouse store in Southeast Portland, and the Chrysler Parts Distribution Center in Beaverton — didn't know the photos were being used on the Web site. The FBI shut down the site in February.
Both men apologized for their crimes. King denied requests by both men for lighter sentences, calling it a significant fraudulent scheme. He also said the men took steps to keep the retailers from inspecting merchandise and once moved their operation in an attempt to deter a police investigation. — Mark Larabee
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