Homeless shelter employee allegedly stole residents’ identities to commit tax fraud
A former employee at a California homeless shelter was recently accused of stealing nearly $20,000 from homeless residents after filing fraudulent tax returns on their behalf. The employee was charged with seven counts of wire fraud, aggravated identity theft, and making a false tax return. Marcela Heredia was employed as a “youth care specialist” for the shelter and also held a position with the IRS as a tax examiner. Heredia worked with many young people that had recently left the foster care system and was supposed to help provide them with life skill workshops and support services. She is alleged to have taken advantage of her access to residents’ personal information to commit tax fraud.
Beyond that, prosecutors say that Heredia also offered to help residents file their taxes and would then claim that the youth had not earned enough money to file tax returns. She is then believed to have filed the returns without the residents’ knowledge, before accepting the tax refunds, and depositing the stolen money into her own personal accounts. Heredia is alleged to have listed false wages and even a company that did not exist. Prosecutors say she also claimed a disabled niece as a dependent in 2011, and as it turns out the child is neither her niece nor dependent, or even disabled. If convicted on the charges, Heredia a maximum of 20 years in prison, along with the standard $250,000 fine for wire fraud cases. [For more: The Daily Beast]
Walmart close to acquiring Bonobos for about $300 million
Walmart is believed to be finalizing a deal to purchase men’s clothing retail startup Bonobos Inc. for an estimated $300,000,000. A spokesperson said recently that discussions are entering the final stages, although timing remains unclear. Bonobos was founded in 2007, and began as an exclusively online retailer, selling men’s dress pants before quickly expanding its selection to include colorful plaid shirts and shorts. The company has totaled over $120 million in capital raised from investors including Coppel Capital, Accel Partners, Lightspeed Venture Partners, and Nordstrom Inc.
This latest acquisition for Walmart comes as the company continues recent attempts to increase online presence. Last year, Jet.com was bought for over $3.3 billion. Walmart has already purchased other retailers this year including Moosejaw and ModCloth, a women’s apparel seller.[For more: Bloomberg]
Retailers going bankrupt at staggering rate
Nine retailers have filed for bankruptcy so far in 2017, which has already matched the same number as all of 2016. “2017 will be the year of retail bankruptcies”, says bankruptcy lawyer Corali Lopez-Castro. Furthermore, of the retailers staying open, many will be forced to close a record amount of stores this year. In fact, over 3,500 stores are expected to be shut down in the next few months.
Payless ShoeSource, hhgregg, The Limited, RadioShack, BCBG, Wet Seal, Gormans, Eastern Outfitters, and Gander Mountain have all filed for bankruptcy so far. This is on pace to surpass the 20 retailers that filed for bankruptcy back in 2008, during the financial crisis. Back then, many banks and private equity firms were willing to bail out retailers and help maneuver them out of bankruptcy through restructuring. The difference this time around is that private firms and banks see more serious structural issues, rather than short operational solutions.
This is mainly due to fundamental shifts in the habits of retail shoppers. In fact, shopping mall visits declined by a staggering 50% between 2010 and 2013. Many malls have been quickly losing stores to closures and have struggled to fill the large empty spaces. While some spaces have been filled with restaurants, movie theaters, and such, if retailers continue to close at this pace, shopping malls will struggle to find tenants. [For more: Business Insider]
Postal employee pleads guilty to stealing thousands
A US postal employee recently pleaded guilty to stealing thousands of dollars from the Dallas Post Office. 55-year old Carol Sosik, was charged with a felony count of misappropriating postal funds after admitting to the theft of more than $4,600 during employment. Sosik worked as a distribution window clerk and was responsible for selling postage stamps.
She faced a maximum of 10 years in prison and a $250,000 fine if convicted, but under the plea deal, she will likely serve less than six months in prison. The sentencing date has not yet been set and Sosik was allowed to remain free until that time. [For more: Citizens Voice]
PetSmart acquires fast-growing online pet food retailer
PetSmart is attempting to expand e-commerce with the recent acquisition of Chewy, a leading online retailer of pet food and related products. Chewy, founded in 2011, offers a large variety of products for animals including dogs, cats, and even horses. Michael Massey, the PetSmart president and CEO, said his company is “focused on improving customers’ experience in-store and online”.
The deal is expected to be finalized by the end of PetSmart’s second fiscal quarter of 2017, although Ryan Cohen, CEO of Chewy, will continue to lead the brand, as Chewy will operate as an independent subsidiary. Petco, the competing rival to PetSmart, recently made efforts to increase online capabilities by acquiring PetCoach, which is a website and app aimed at offering pet owners advice and connecting them with veterinarians to help answer personalized questions. [For more: Chain Storeage]
30 percent of young Europeans buy counterfeit goods and download illegally
It is estimated that over 30% of European’s between the ages of 15 and 24 purchase counterfeit goods and illegally download pirated music or movies. Furthermore, web surfers are struggling more and more to distinguish the difference between reputable media sharing and illegal sites.
The European Union Intellectual Property Office (EUIPO), recently published an update to a 2013 survey in which 26,000 Europeans aged 15 and older were asked about their perceptions relating to intellectual property. On the survey, over 97% of respondents believe that creators should have intellectual rights and receive remuneration for their work. Furthermore, over 70% of those surveyed believe nothing can justify the purchase of counterfeit products, and believe doing so damages employment and trade value.
But on the flipside, the 30% that does not see the harm in purchasing counterfeit goods represents a slight increase from five years ago. This coincides with the fact that a growing number of people are not clear on what constitutes legitimate sources for authentic products. Finally, over 35% reported being unsure of whether products bought were counterfeit or not. [For more: Italy Europe 24]
An insidious problem that is picking your pocket
Organized retail theft is a growing problem that is costing honest consumers, as retailers are forced to combat lost sales tax revenue by increasing prices. Pima County, Arizona retailers lost nearly $6 million last year due to retail theft. Organized retail theft is often mistaken for standard shoplifting committed by juveniles and those stealing to survive. However, organized retail thieves steal for a living or to fund addictions.
The Coalition Against Retail Theft (CART) began in 2015, as local retailers began complaining to the Tucson Metro Chamber that organized retail crime was on the rise. CART set three objectives to combat this issue. “First, quantify the seriousness of the organized retail theft problem. The second objective was to get organized retail thieves off the street and behind bars. The final objective was to increase awareness of the problem with consumers and to give retailers the tools to fight back”. New legislation was proposed in 2016 to require fingerprinting and photographing of retail thieves. This should help prosecutors convert misdemeanors into felonies with jail time involved.
CART also launched an education campaign targeting five groups. Consumers, to be informed as to how much organized retail theft actually costs them. Retailers, in an effort to encourage them to attend workshops to learn the best ways to deter and report retail theft. Public officials to be educated on the cost organized retail theft costs constituents. Swap meet owners, in order to warn them that venues are being monitored for the sale of stolen items. Finally, inmates to be told clearly that the community will not tolerate retail theft and changes are being made to combat these issues. [For more: Inside Tucson Business]
The post Breaking News in the Industry: April 19, 2017 appeared first on LPM.