Federal Judge Rips Into Best Buy Loss Prevention VP

Written by Evan Schuman
December 23rd, 2010

The head of loss prevention is a thankless job at any retail chain, but the LP VP at Best Buy on Monday (Dec. 20) discovered a new anti-perk to the job: getting royally chewed out by a federal judge in an open courtroom.

The chief anti-fraudster at the $50 billion chain, Paul Stone, wasn’t even accused of anything (well, not until he walked into court, at least). He showed up in court to ask the judge to give a harsh sentence to some Best Buy contractors—who were convicted of overcharging Best Buy to the tune of almost $33 million—along with a former Best Buy manager who supposedly let the fraud happen, for kickbacks.

But in the eyes of Michael Davis, who is the chief federal judge for Minnesota, the lackluster mechanisms and processes that Stone’s LP group put in place allowed the crime to happen and Stone should have been punished. (As the judge started in, it’s likely that Stone thought, “Ok. Looks like the judge doesn’t need any sentencing help today. I’ll just drive back to the office now.” But it was too late.)

The judge started by saying that Best Buy is a huge chain and should have caught this criminal activity much earlier. “I don’t know if you were the loss management person at the time of this. If you were—and if I was the CEO—your head would have been gone.” (Presumably, the judge meant that he would have been fired—as opposed to being beheaded—but the rest of his comments could pretty much support either interpretation.)

The judge said that Best Buy “is not a mom-and-pop corporation.” He added: “Would you not agree that the corporate culture within the buyers was one of corruption and that Best Buy should have known something about that way before this occurred? And you coming here and saying, ‘oh, poor Best Buy, we have a $40 million loss without any types of checks,'” (as in “checks and balances,” oversight).

Judge Davis was only getting started. He described how he sat through the trial and found Best Buy’s culture “astounding.” Said the judge: “You don’t want to even have the public know about all these private trips that your buyers were going on and being wined and dined. Even the King of Saudi Arabia couldn’t afford some of these things. So don’t come here and talk about, ‘Oh, Best Buy’s culture has taken a hit’ and everything else.”


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