Evan Schuman's StorefrontBacktalk

The judge continued: “This was Best Buy’s culture, and you can’t have a group of people who are a significant portion of what Best Buy does doing this and no one knows anything about it. Don’t do an end-run on me and say, ‘My goodness, I don’t know what’s going on and my CEO doesn’t know what’s going on, my CFO doesn’t know what’s going on, the supervisors don’t know what’s going on.'”

Stone (who, to his credit, opted to not say “Whoa. I don’t get paid nearly enough to take this crap”) then bravely asked if he could respond. He argued that Best Buy has some 186,000 employees and that Loss Prevention is a relatively small team. He said the former Best Buy manager who was charged—Robert Paul Bossany—had not cooperated with Best Buy’s internal investigation.

“You’re right. I mean, it’s certainly not information we would like to have out in public. But we felt a duty because of the fact that this is one rogue department that stretched the rules, they stretched the boundaries of our ethics policy and essentially benefitted [several] vendors,” Stone said.

Stone cited as an example of the fraud that Bossany approved a $240 invoice for a $24 part. (He strangely told the judge that $240 is “more than 12 times” $24. Guess the judge flustered him more than he realized.)

Many of the details of the case involved a vendor called Chip Factory and its activities between 2004 and 2007. The case was one where the vendor won business with low bids, but then charged much more. The Minneapolis Star-Tribune reported on one instance where “Chip Factory bid $69 for a computer screen and then charged Best Buy $1,699 for it.”

The judge eventually sentenced the president of Chip Factory, Russell Cole, to 15 years in prison. He also sentenced Bossany, who had been a Best Buy vendor relations manager, to 7-and-a-half years in prison. Bossany’s sentence was reduced because he wore a wire to secretly record conversations with some of the vendor executives involved, in cooperation with federal investigators.

Best Buy issued a short statement saying that “Since learning of this scheme back in 2007, we made significant changes to our processes to help ensure that this type of fraud does not occur again.”