2 ordered to pay millions as part of Internet fraud sentences
2:34 PM Thu, Jul 31, 2008 | Permalink
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By Paul Grimaldi A federal judge in Providence this morning ordered a defendant in an Internet fraud case to pay $2.2 million in restitution and complete 1,200 hours of community service -- the most time the judge has ever required anyone to serve -- as part of a sentence handed down as the result of a scheme that bilked more than $15 million from people and businesses around the country. Cory Johnson, 30, formerly of 272 Pierce Ave., Warwick, pleaded guilty in January to charges of conspiracy to commit wire fraud and money laundering for his role in Mixitforme.com, a Providence Internet retailer of consumer electronics. Johnson ran the company with a partner, David Whitaker, who remains in federal custody after his arrest in March. Johnson, 30, has admitted to signing documents claiming Mixitforme's gross receipts totaled about $2.3 million during 2003 and 2004, years in which the company wasn't registered to do business, and that his federal tax returns for those years didn't reflect any business income from Mixitforme. He also admitted to improperly transferring $27,000 in December 2005 from Mixitforme's business account at Bank Rhode Island to his personal account at the bank. He faced up to two years in prison for his actions. Instead, U.S. District Court Judge William E. Smith ordered Johnson, who now lives in Morrisville, Pa., to five years supervised release -- including home confinement for nine months, to complete the lengthy community service and to pay $2.2 million to Atlanta-based Nova Information Systems Inc., a credit-card processing company forced to reimburse customers who never received goods they ordered from Mixitforme. Also sentenced in the case today was David Carpenter, a Cranston man and former branch manager for Bank Rhode Island. Carpenter pleaded guilty in March to accepting a bribe in exchange for helping Johnson and Whitaker defraud the bank of nearly $1 million - the amount the bank lost before the fraud was discovered. Carpenter was ordered to serve one day in federal custody, followed by six months of home confinement during five years of supervised release. Also, he was ordered to pay $945,000 in restitution, split between Bank Rhode Island and Progressive Insurance, which covered part of the bank's loss as a result of the fraud scheme.
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