TAX NEWS - June 2010

Illinois Tax: Couple convicted of defrauding Best Buy, tax evasion

A Deerfield couple convicted of defrauding Best Buy Co. are considering appealing their convictions.

A federal jury in Minnesota on June 3 convicted Russell and Abby Cole of defrauding the retail electronics giant in a multimillion-dollar parts supply scheme.

The 17-day trial concluded with guilty verdicts for Russell Cole, who was convicted of one count of conspiracy to commit mail fraud and wire fraud, 12 counts of mail fraud, five counts of wire fraud, four counts of tax evasion, one count of conspiracy to commit money laundering, and one count of conspiracy to defraud the United States.

Abby Cole was convicted of one count of conspiracy to commit mail fraud and wire fraud, one count of conspiracy to defraud the United States and four counts of tax evasion.

Prosecutors made the case that the Coles' company, Chip Factory, collected $41 million in fraudulent orders it billed for supplying Best Buy with electronic parts, which it promised to deliver at lower prices in order to win the contracts.

Shelly Kulwin, Abby Cole's attorney, was "very disappointed" his client was convicted on the conspiracy and tax evasion charges when the jury acquitted her of 20 other related charges.

"It seemed very inconsistent to me," said Kulwin, who moved to dismiss charges when a key witness apparently changed his testimony, and also filed a motion for a mistrial when the government recalculated evidence it submitted supporting the tax evasion charges.