Three industry members have been convicted of defrauding The Wholesale House based in Hicksville, OH, a distributor of car audio and other products.
The former President and Vice President of The Wholesale House, Marcy Keesbury and Charles “Mick” French, along with Information Technology Director Justin Pennington, age 30, were found guilty of setting up a fake Internet company. The fake company bought products from The Wholesale House, much on credit, and then resold the goods to retailers and consumers, reported The Florida Times Union
The Internet company was called 3Kings LLC and it purchased nearly $40 million worth of products.
Prosecutors said 3 Kings caused significant financial harm to The Wholesale House by competing with it illegally. The Wholesale House claimed about $4.8 million in the total net loss from the unpaid 3 Kings debt.
Pennington has been found guilty of conspiracy and 9 counts of wire fraud. He faces up to 20 years in prison for each count. The three defendants have been ordered to repay about $5 million in total to the Wholesale House. Pennington is due for sentencing the week of August 2.
Keesbury and French reportedly cooperated with authorities to receive a lesser sentence. According to Wane.com, the fraud became apparent when The Wholesale House began to question French about the 3 Kings ability to repay its debt to the distributor. Hints of the scheme were revealed and the FBI was called in.
Keesbury and French have agreed to pay restitution and face up to 5 years in prison.
The Wholesale House is owned by Steve and Mary Height. Among the brands it carries are American Bass, Audiovox, Bazooka, Blaupunkt, Boss Audio, Boyo, Cadence, Cerwin Vega, Cobra, Dual, DS18, Fusion, Hifonics, Infinity, JBL, Jensen, JVC, MB Quart, MTX, Pioneer, Power Acoustik, Pyle, Soundstream,and Sundown Audio.
President of The Wholesale House Mark Yoder said, “TWH [The Wholesale House] took a BIG hit when this happened, but thanks to the Heights being able to put their own personal money back into the business and get us back on our feet, business is back and very strong.”
Photo: The Wholesale House Ohio headquarters