Feature Story:
The three industry members convicted of defrauding distributor The Wholesale House, Ohio last year have been sentenced to prison, according to the Dept. of Justice.
Last week, United States District Judge Brian Davis today sentenced former executives of The Wholesale House, OH for their roles in a multi-million dollar scheme to buy car audio and related products on credit from The Wholesale House (TWH) and then resell them on the web, while failing to pay back millions of dollars owed to TWH.
President and Vice President of The Wholesale House, Marcy Keesbury and Charles “Mick” French, along with Information Technology Director Justin Pennington, were found guilty earlier of setting up a fake Internet company called 3 Kings, which competed with TWH.
3 Kings had purchased nearly $40 million in goods from TWH and never paid the full amount. During the trial, TWH owners testified they were forced to infuse $7 million into the company to keep it afloat and retain its more than 60 employees.
Pennington, age 30, of Florida, was sentenced to almost 5 ½ years in prison and ordered to pay over $4 million in restitution. Keesbury, 54, and French, 50, both from Indiana, were each sentenced to almost 3 ½ years in prison and were also fined over $4 million in restitution.
The case was investigated by the FBI. Pennington was found guilty in April 2017. Keesbury and French pleaded guilty in October 2016.
The Wholesale House is owned by Steve and Mary Height. Among the brands it carried as of last year were 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.
Mark Yoder, current President of TWH said, “It has been a long process and this will bring closure for the Heights and The Wholesale House. Despite the hardships this caused we have bounced back and the future looks bright for TWH.”
Photo: The Wholesale House
Get the news before your competitors do. CEoutlook is the daily brief read by over 6,500 dealers, reps and manufacturers across the mobile electronics industry. Subscribe free.
So they bought 40 million in goods, which they probably sold for 50-60 million and were ordered to repay around 12 million. Sounds like they did ok for themselves.
not all of the guilty have been exposed. a great deal of complicity has taken place.
It is a GREAT day for all of us when RIGHT wins. Continued good wishes to The Wholesale House.