A second man has agreed to plead guilty to federal charges in connection with an Internet sales scheme in which nearly US$15 million was netted from people across the US who wanted to buy electronic gadgets.

Meanwhile, new twists have appeared in the tale of the role played by the man who pleaded guilty first in this case (DC World News, 14 January 2008) and whose primary purpose appeared to be to create and supply fraudulent letters of credit (L/Cs).

Internet vendor

Cory Johnson, a US citizen, faces up to 15 years in prison and fines totalling US$500,000 for his part in the 2005 scam that conned suppliers and customers of Mixitform.com - supposedly an Internet vendor of iPods, Xboxes, PlayStations cell phones and other consumer electronics - out millions of dollars.

Johnson, who was the owner of the Rhode Island-based business, is charged with conspiracy to commit wire fraud and money laundering.

Payments and L/Cs

Essentially, the scam involved Mixitforme.com staff taking payments for customer orders that were never fulfilled.

Suppliers meanwhile were not paid but they had been convinced to supply the Rhode Island Company, partly based on fraudulent L/Cs created by David Carpenter, a former banker who was the first person to plead guilty in this matter.

Twist in tale

Now it seems that Johnson and another man connected with the company, David Whitaker, claim that they did not know the L/Cs were fraudulent.

Whitaker has apparently claimed that he and Johnson were unaware that Carpenter had no authority to arrange the L/Cs and that the former banker only actually worked at Mixitforme.com for one day before he was fired.

Whitaker reportedly made this statement by phone from an undisclosed location in South America where he is a fugitive.

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