A federal jury has convicted a 30-year-old Ponte Vedra man on one count of conspiracy and nine counts of wire fraud, acting U.S. Attorney W. Stephen Muldrow announced.
Justin G. Pennington, a resident of Nocatee’s Willowcove neighborhood, faces up to 20 years in federal prison on each count and mandatory restitution of approximately $5 million. His sentencing hearing is scheduled for August 2, 2017.
According to the evidence presented at trial, while Pennington was employed as an information technology director at The Wholesale House – an Ohio-based company with offices in Jacksonville – he and his co-conspirators created a fraudulent company known as 3 Kings, LLC. Incorporated in Delaware in an attempt to conceal the identity of its owners, 3 Kings purchased products from The Wholesale House at or near cost and then resold those products to consumers and retailers.
Unbeknownst to the owners of The Wholesale House, 3 Kings illegally competed with The Wholesale House’s customers, causing significant financial difficulties for the company’s legitimate customers. In all, federal prosecutors proved, 3 Kings purchased nearly $40 million of products from The Wholesale House and never paid the entirety of its bills owed to them. Instead, Pennington and his co-conspirators spent tens of thousands of dollars themselves, with Pennington incurring credit card balances of up to $100,000 per month, while owing his employer millions of dollars.
During the trial, Pennington’s co-conspirators testified that he was the mastermind of the scheme, creating detailed proposals, naming and incorporating the company, and controlling the corporation’s bank accounts. The Wholesale House owners, meanwhile, testified that they had personally infused more than $7 million into the company to ensure its survival and to protect the jobs of the company’s more than 60 employees.
